The same old pattern played out today where MBS weren't able to keep solid pace with Treasury movement.  This is one of those "for better or worse" kind of things.  MBS tend not to gain as much ground as Treasuries when bonds are rallying (like yesterday), but in return, they usually avoid losing as much ground when bond yields are moving higher.   

10yr yields ended the day more than 5bps higher (or half a point lower in terms of price).  Fannie 3.0 MBS coupons were only 1 tick (0.03) lower by comparison!

Some of the overall bond market weakness was intact right at the start of the day after trade-related headlines did some damage overnight.  After a modest recovery during the first few hours of the domestic session, bonds weakened steadily heading into the afternoon hours--perhaps with some apprehension about the 10yr Treasury auction.

The auction results were relatively decent, but not strong enough to suggest that the bond market's afternoon weakness wasn't warranted.  From there, the release of the minutes from the Fed meeting 3 weeks ago did very little to change momentum.  A trade headline (China said a deal was less likely) hit stocks and helped bonds late in the day, but not in any significant way.


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
101-24 : -0-01
Treasuries
10 YR
1.5870 : +0.0480
Pricing as of 10/9/19 5:35PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:07PM  :  No Whammies in Fed Minutes
1:08PM  :  10yr Treasury Auction Does No Harm
12:22PM  :  ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "POLICYMAKERS GENERALLY MORE CONCERNED ABOUT RISKS ASSOCIATED WITH TRADE TENSIONS, GEOPOLITICS AND GLOBAL ECONOMY - MINUTES."
Matthew Graham  :  "SEVERAL PARTICIPANTS SAID STATISTICAL MODELS ON LIKELIHOOD OF RECESSION IN MEDIUM TERM HAD INCREASED NOTABLY IN RECENT MONTHS - MINUTES"
Matthew Graham  :  "light indirects, but pretty good otherwise."
Matthew Graham  :  "RTRS - PRIMARY DEALERS TAKE 28.68 PCT OF U.S. 9-YEAR 10-MONTH NOTES SALE, DIRECT 12.79 PCT AND INDIRECT 58.53 PCT"
Matthew Graham  :  "RTRS - U.S. 9-YR 10-MO NOTES BID-TO-COVER RATIO 2.43, NON-COMP BIDS $3.31 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $24 BLN 9-YR 10-MO NOTES AT HIGH YIELD 1.590 PCT, AWARDS 59.01 PCT OF BIDS AT HIGH"
Matthew Graham  :  "auction preview: current estimated yield is 1.596. bid to cover has averaged 2.5x and indirect bidding has averaged almost 64%. These are on the high side of expectations for this auction though, considering the low yield. For more on these terms: Treasury Auction Jargon, Definition, and Significance "

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Oct 09
7:00 MBA Purchase Index w/e 252.2 263.8
7:00 Mortgage Refinance Index w/e 2418.1 2202.6
10:00 Wholesale inventories mm (%) Aug 0.2 0.4 0.4
13:00 10-yr Note Auction (bl)* 24
14:00 FOMC Minutes *