Bonds were weaker overnight in response to upbeat trade headlines from China's commerce minister as well as Italian political news (read the MBS Live update).  The morning's economic data passed without a trace, not that we would expect too much from a GDP revision or yet another Jobless Claims reading around 215k.   Things didn't pick up until the 9:30am NYSE open, which has been a focal point for morning volatility this week.  This time around, it pushed bond yields higher.  MBS followed with modest weakness, but not at the same pace as Treasuries.

Thus began the outperformance.  

Less than an hour later, headlines hit the wires regarding a European central banker downplaying the need for more stimulus and characterizing the market's expectation for an imminent rate cut as overblown.  Bonds didn't like that--especially core EU bonds and Treasuries.  MBS, on the other hand, didn't much care.  By the time the 7yr Treasury auction came out much weaker than expected, the Treasury complex was looking fairly nervous with 10yr yields up nearly 7bps.  

MBS, on the other hand, don't take much guidance from overseas central bank policy fluctuations and Treasury auction supply.  Not only that, but the mortgage market has been on the ropes enough to benefit from some rebound effect coming the other way.  All of the above made their outperformance noticeable today.  But don't take repeat performances for granted.  They will happen, but there's no guarantee on the timing.  Simply put: today was a victory.  We'll take it.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
101-26 : -0-02
Treasuries
10 YR
1.5010 : +0.0330
Pricing as of 8/29/19 4:56PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:08PM  :  Super Weak 7yr Auction, but MBS May Not Care Too Much
10:19AM  :  ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders
8:52AM  :  Weaker Overnight; No Impact From data; MBS Outperform

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "1pm target was 1.470"
Matthew Graham  :  "RTRS - U.S. SELLS $32 BLN 7-YEAR NOTES AT HIGH YIELD 1.489 PCT, AWARDS 93.52 PCT OF BIDS AT HIGH"
Hugh W. Page  :  "Boy, the Fed is getting pushed left and right to cut rates. Look at all these articles in the newstream this morning about how the Fed will cause a recession if they don't cut rates "aggressively" or "significantly". I don't get it. The consumer seems to be doing fine."
Spencer Packer  :  "Sure love watching MBS outperform on days like this."
Timothy Baron  :  "I just want to thank my competitors for helping me market refis. Clients get a mailer from some other lender and they call me right away. :)"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Aug 29
8:30 GDP Prelim (%)* Q2 2.0 2.0 2.1
8:30 Jobless Claims (k) w/e 215 215 209
10:00 Pending Home Sales (%) Jul -2.5 0.0 2.8
10:00 Pending Sales Index Jul 105.6 108.3
13:00 7-Yr Note Auction (bl)* 32