We knew we'd have to deal with it at some point, and now we have to wonder if it's already here: the coronavirus bounce.  

Why did we know it was coming?

Nothing too complicated here...  The recent rate rally was/is unequivocally driven by a big, uncertain, temporary factor that has required markets to position defensively for stuff that probably won't happen.  Once it looks like the most dire coronavirus scenarios have been ruled out, we'd expect markets to give back the premiums they'd been paying for increased uncertainty.  In other words, bond yields should bounce.

Why are we wondering if it's already here?

This one is simple too.  The rate rally has been sharp.  It's lasted a few weeks.  It's taken rates back in the vicinity of recent long term lows.  It's made technical measurements of momentum look ripe for correction.  And now, finally, today's weakness arrived at a pretty ideal time and in a pretty ideal amount to fill the role of "day 1" of such a correction.

All of the above having been said, days 2, 3, and 4 will be more important.  Coronavirus news can certainly still shift and global economic data can certainly still have a say.  That's not to suggest complacency as much as it is intended to acknowledge the ongoing potential for volatility--at least until the next trend is established.  

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
102-01 : -0-04
10 YR
1.6030 : +0.0830
Pricing as of 2/4/20 6:26PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:46AM  :  ALERT ISSUED: Negative Reprice Risk Increasing For a Few Lenders
10:14AM  :  Bonds in Correction Mode; You've Been Warned

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Downs  :  "I think Matt’s “You’ve been warned” update should have been tied to the 2.5 coupon jumping back on the board, LOL"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Feb 04
10:00 Factory orders mm (%) Dec 1.8 1.2 -0.7
Wednesday, Feb 05
7:00 MBA Purchase Index w/e 313.7
7:00 Mortgage Refinance Index w/e 2581.2
8:15 ADP National Employment (k)* Jan 156 202
10:00 ISM N-Mfg PMI * Jan 55.0 55.0
10:00 ISM N-Mfg Bus Act * Jan 56.5 57.2