There were 2 sorts of trade headlines in play today, but before we get to those, I wrote something today that bears repeating.

"The trade deal, in and of itself, will not dictate the direction of markets in the big-picture over the longer run, but it WILL definitely deliver plenty of volatility inside a fairly wide range as market participants continue trying to figure out if the economy is slowing down, pausing, or preparing to speed back up."

All that to say that neither of the following developments were game changers by any means, but still perfectly entitled to move the market.  

The first hit right out of the gate in the overnight session in response to the Senate passing a bill supporting the rights of Hong Kong protesters.  Technically, the bill suggested an annual review of the special treatment received by Hong Kong in light of the ongoing protests, but it impacted markets solely because it ran the risk of escalating tensions between the US and mainland China during the trade negotiation process.

Bonds consequently made solid gains in the overnight session before fizzling sideways for most of the domestic session.  Then, just after 1pm, another headline hit suggesting the trade deal talks were getting more complicated and that negotiations could easily persist into the new year.  Markets reacted as we'd expect, with stocks and bond yields falling in concert.

Despite the rally, 10yr yields respected the technical floor at 1.74%--a potential early warning sign that the most recent rally (past week and a half) is reaching a natural stopping point.


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
101-15 : +0-02
Treasuries
10 YR
1.7470 : -0.0390
Pricing as of 11/20/19 5:08PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:20PM  :  Fed Minutes Pass Without a Trace
1:18PM  :  Bonds at Best Levels After Trade Headline
11:32AM  :  Bonds Doing Decent Job of Resisting Peer Pressure

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "Welcome to the club LO"
Lawrence Oliver  :  "MG is now my Sensei."
Matthew Graham  :  "LO, there are some technical underpinnings for MBS widening right now. The bullish flattening of the yield curve, reasonably quick move to lowest yields of the month in Treasuries based on unexpected market movers, and higher implied volatility in the options market are all contributing. Also getting to be a less liquid time of year for MBS, AND Treasuries might be breathing a relative sigh of relief after having gotten through a big slate of corporate bond issuance. Confused yet?"
Lawrence Oliver  :  "Why are MBS's not moved by whatever is moving treasuries today"
Victor Burek  :  "now lets get back to the lows of the year"
Matthew Graham  :  "PHASE ONE U.S.-CHINA TRADE DEAL MAY NOT BE DONE THIS YR: RTRS"
Sung Kim  :  "TRID is good. Not sure why anyone would want to get rid of it unless you prefer same day hud-1 sitting at table"

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Nov 20
7:00 MBA Purchase Index w/e 270.4 253.4
7:00 Mortgage Refinance Index w/e 2190.6 2374.6
Thursday, Nov 21
8:30 Philly Fed Business Index * Nov 7.0 5.6
8:30 Jobless Claims (k) w/e 219 225
10:00 Existing home sales (ml)* Oct 5.47 5.38
10:00 Exist. home sales % chg (%)* Oct 1.4 -2.2