Bonds were stronger to start the domestic session after European bonds led a rally late in the overnight hours.  Trading was flat during the domestic morning hours.  A big miss is the producer price data was overlooked because--well.... producer prices are almost always overlooked when it comes to market movement.

When Europe closed for the day, US bond yields began to rise, and that's really the truest and most compelling narrative of the day, but things did happen in the afternoon, and the market participants who remained were keen to make  much of little.

Of the afternoon market movement candidates, a strange tweet about an off-the-beaten path US/China announcement garnered the biggest reaction (something about Visas being revoked for certain Chinese officials), but it was certainly Powell's speech that got most of the mainstream attention.  Simply put, it sounded, for a moment, like Powell was announcing some sort of QE4 program.  After all, most of our experience with the Fed expanding its balance sheet (which Powell said was coming) centers on QE. 

But Powell was quick and careful to note that this wouldn't be QE.  Most traders believed him, even if some analysts and market-related websites didn't.  Either way, bonds didn't move in a meaningful way in response to Powell, so that's all the verdict we need on this one.  When the next round of actual QE is eventually announced, we'll all definitely know it and it will be easy to see the market's reaction.  Today wasn't that day.


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
101-27 : +0-00
Treasuries
10 YR
1.5320 : -0.0210
Pricing as of 10/8/19 5:24PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:36PM  :  ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders
8:38AM  :  Producer Prices Much Weaker; Minimal Reaction

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS - FED CHAIR POWELL SAYS WE WILL ANNOUNCE A PLAN SOON TO ADD RESERVES BACK IN TO ADDRESS MONEY MARKET VOLATILITY"
Matthew Graham  :  "RTRS - FED CHAIR POWELL SAYS RESUMPTION TO BALANCE SHEET GROWTH IS 'IN NO SENSE QE'"
Matthew Graham  :  "just in case you missed it the first time, Powell reiterated:"
Matthew Graham  :  "RTRS - FED CHAIR POWELL SAYS FED IS MAKING GREAT PROGRESS ON FRAMEWORK REVIEW, HOPEFUL TO COME OUT WITH SOME INNOVATIONS"
Matthew Graham  :  "Some headline about"U.S. IMPOSES VISA BANS ON CHINESE LINKED TO XINJIANG ABUSES""
John Tassios  :  "did a tweet come out?"
Dmitriy S  :  "whats happening?"
Sung Kim  :  "stocks just fell off a cliff and then popping back"
Matthew Graham  :  "RTRS - POWELL SAYS FED'S PURCHASES OF TREASURY BILLS TO RESOLVE RECENT TECHNICAL ISSUES WILL NOT MATERIALLY AFFECT STANCE OF MONETARY POLICY"
Matthew Graham  :  "RTRS - FED CHAIR POWELL SAYS GROWTH OF BALANCE SHEET FOR RESERVE PURPOSES SHOULD NOT BE CONFUSED WITH QUANTITATIVE EASING"
Matthew Graham  :  "RTRS - POWELL SAYS 'TIME IS NOW UPON US' FOR FED TO EXPAND BALANCE SHEET TO MAINTAIN APPROPRIATE LEVEL OF RESERVES"
Matthew Graham  :  "RTRS - FED CHAIR POWELL SAYS FED WILL SOON ANNOUNCE MEASURES TO ADD TO RESERVES SUPPLY OVER TIME"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Oct 08
8:30 Core Producer Prices YY (%)* Sep +2.0 2.3 2.3
8:30 Producer Prices (%) Sep -0.3 0.1 0.1
13:00 3-Yr Note Auction (bl) 38
Wednesday, Oct 09
7:00 MBA Purchase Index w/e 263.8
7:00 Mortgage Refinance Index w/e 2202.6
10:00 Wholesale inventories mm (%) Aug 0.4 0.4
13:00 10-yr Note Auction (bl)* 24
14:00 FOMC Minutes *