By the end of last week, although there was potentially a sliver of hope afforded by Friday's highs being slightly lower than Thursday's, it looked like bonds were punching out of the massive 2019 rally and embarking on the new trend toward higher rates.  But the new week of trading has increasingly called that conclusion into question.

Granted, there were a few other reasons to hold out hope over the weekend (trade deal backtracking, temporary trepidation about new bond issuance, the technical ceiling at 1.94% potentially acting as a buying cue, and the chance that the weakness was exacerbated by the "3-day weekend effect"), but no one could be blamed for not wanting to catch that falling knife.  

By moving back down to 1.82%, 10yr yields have already made it clear that a surge up and over 2.0% doesn't make sense yet, but the bigger question is whether a surge back down into the heart of the previous range makes any more sense.  I really don't think traders know the answer yet.  We're all waiting to see how the econ data continues to unfold (like tomorrow's Retail Sales) as well as several key non-data market movers (trade deals and geopolitical risks mainly).  At the very least, however, a case for a comeback is being made so far this week.  While it's no justification for complacency, it's better than the alternative.


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
101-09 : +0-08
Treasuries
10 YR
1.8240 : -0.0450
Pricing as of 11/14/19 4:56PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:13AM  :  Bonds at Best Levels After Powell Mentions Reckoning

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "because last you heard from them, they told you "no more rate cuts for now" and they don't want you to freak out about that"
Oliver Orlicki  :  "Seems like they are getting dovish again.....Hmmmm why?"
Oliver Orlicki  :  "More dovish commentary"
Matthew Graham  :  "RTRS - BULLARD SAYS RISKS REMAIN, BUT FED CUTS THIS YEAR MAY PROMPT FASTER THAN EXPECTED GROWTH, BETTER INFLATION OUTCOMES NEXT YEAR"
Matthew Graham  :  "RTRS - BULLARD HAD FLAGGED CONCERNS OVER YIELD CURVE INVERSION BUT SAYS MONETARY POLICY NOW 'CONSIDERABLY MORE ACCOMMODATIVE'"
Matthew Graham  :  "RTRS - FED'S WILLIAMS SAYS LEVEL OF RESERVES IN SYSTEM DID AFFECT LIQUIDITY IN MARKET, SENSITIVITY OF INTEREST RATES"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Nov 14
8:30 Producer Prices (%) Oct +0.4 0.3 -0.3
8:30 Core Producer Prices YY (%)* Oct +1.6 1.5 2.0
8:30 Jobless Claims (k) w/e 225 215 211
Friday, Nov 15
8:30 Retail Sales (%)* Oct 0.2 -0.3
8:30 Import prices mm (%)* Oct -0.2 0.2
8:30 NY Fed Manufacturing Nov 5.00 4.00
9:15 Industrial Production (%) Oct -0.4 -0.4
10:00 Business Inventories (% ) Sep 0.1 0.0