At a few points in the past 2 days, it looked as if bonds were finally ready to move back toward lower yields after 2 weeks spent moving fairly quickly higher.  After all, much of that weakness was due to fear that the UK could slam through a negotiated Brexit deal in enough time to have it approved by the October 31st deadline.  As of yesterday, it was all but guaranteed that could no longer happen, so it wouldn't have been a surprise to see bonds capitalize on the initial strength.

Instead, bonds spent essentially all day moving higher in yield!

Now today, they had another chance... Perhaps yesterday was too soon for the rally to commence.  If we could get through today's econ data and Treasury auction with no whammies, maybe today would make more sense as ground zero for the next push toward lower rates.  

For a few hours, it looked like that's what was happening.  Markit PMI data was tepid-to-weak.  Durable Goods disappointed.  The 7yr Auction was well-received.  And a morning sell-off following Draghi comments was quickly thwarted.  Add all that to the fact that Treasuries have been oversold and Brexit risk has been punted into the future at the very least and you have a really decent and logical case for some gains.  I guess it was too logical for bond traders...  

In other words, bonds lost ground throughout the second half of the day, thus failing to capitalize on the lay-up opportunity.  If there's a counterpoint, it's that all of this so-called "movement" has taken place in a range that's narrow enough to suggest we don't take it too seriously, yet.  Still, it would be nice to see the bond market make more of a commitment to improve given the clear permission from data, events, and technicals.


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
101-02 : -0-01
Treasuries
10 YR
1.7610 : +0.0020
Pricing as of 10/24/19 4:16PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:50PM  :  ALERT ISSUED: MBS Back at Lows
9:53AM  :  Markit PMIs Mixed; Bonds Finding Reasons to Rally
9:05AM  :  ALERT ISSUED: Bonds Reverse Course, Spooked by Draghi Comment
8:42AM  :  Durable Goods Weaker Than Expected

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Timothy Baron  :  "Got it, thanks MG."
Matthew Graham  :  "long story short, narrow trading day (not reading much into this movement), and the weakness coincides with Europe closing."
Timothy Baron  :  "Weakness. I know you wrote the alert because of said weakness."
Matthew Graham  :  "why weakness or why did I write an alert?"
Timothy Baron  :  "Why?"
Matthew Graham  :  "
MBS Live Alert Issued
MBS Back at Lows"
Matthew Graham  :  "I think if that were the case, we'd be talking about yields over 2%. Don't be sarcastically daft, man!"
Sung Kim  :  "so in the past week china and brexit all fixed right?"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Oct 24
8:30 Nondefense ex-air (%)* Sep -0.5 -0.2 -0.4
8:30 Durable goods (%)* Sep -1.1 -0.8 0.2
9:45 U Markit Mfg PMI Flash Oct 51.5 50.7 51.1
9:45 U Markit Svcs PMI Flash Oct 51.0 51.0 50.9
9:45 U Markit Comp Flash PMI Oct 51.2 51.0
10:00 New home sales-units mm (ml)* Sep 0.701 0.701 0.713
10:00 New home sales chg mm (%)* Sep -0.7 -0.7 7.1
13:00 7-Yr Note Auction (bl)* 32
Friday, Oct 25
10:00 Consumer Inflation Expectations (5yr) (%) Oct 2.2
10:00 Consumer Sentiment (ip) Oct 96.0 96.0
10:00 Consumer Inflation Expectations (1yr) (%) Oct 2.5