To make a long story short, bond markets have been correcting from their recent rally ever since Greece began correcting from their recent rout.  The latter hasn't taken any new steps today, but the fact that Greek yields haven't gone right back to skyrocket mode is enough for core bond markets to be cautious.

After having improved vs German debt to the tightest levels in weeks and with NFP coming up in 2 days, US Treasuries are understandably underperforming Germany now.  So as German Bunds continue a 2-day bounce higher in yield, Treasuries have done the same.  It's been strongly guided by technical levels and the tradeflow-based motivations (as opposed to trading based on fundamentals and news) is clearly seen in the timing of the movement (US spread vs Germany was steady all night until domestic traders showed up).

Two potential market movers are having essentially no effect this morning: data and oil.  The weaker-than-expected ADP numbers were quickly overshadowed by the morning tradeflow momentum and bond markets have completely overlooked a sharp retreat in oil prices.  The only silver lining is that the 1.84 technical level has been holding up well.  Actually, the other silver lining is that there's been no big-picture change in the fundamentals that continue making a case for a race to the bottom for global bond yields.  Corrections must be endured, but we haven't lost nearly enough ground to consider the current weakness to be anything else.


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
102-21 : -0-07
FNMA 3.5
105-05 : -0-06
FNMA 4.0
106-28 : -0-04
Treasuries
2 YR
0.5160 : +0.0000
10 YR
1.8260 : +0.0280
30 YR
2.4200 : +0.0330
Pricing as of 2/4/15 1:37PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:05PM  :  ALERT ISSUED: Very Slight Negative Reprice Risk
8:36AM  :  Bond Markets Showing Their Hand Regardless of Data

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "seriously though, it really only means that markets weren't ready to break 1.70"
John Tassios  :  "agree VB, this is a good place for bond buyers to jump in. nothing has changed in the big picture for the demand for US TSY's"
Victor Burek  :  "only short term pain"
Sung Kim  :  "So 15bps move yesterday really didn't mean anything?"
Victor Burek  :  "only worry if 1.84 is broken"
Bromi Krock  :  "The continued selling is painful"
Matthew Graham  :  "RTRS- ISM NON-MANUFACTURING BUSINESS ACTIVITY INDEX 61.5 IN JAN (CONSENSUS 57.6) VS 58.6 IN DEC"
Matthew Graham  :  "RTRS - ISM REPORT ON U.S. NON-MANUFACTURING SECTOR SHOWS PMI 56.7 IN JAN (CONSENSUS 56.3) VS 56.5 IN DEC"
Gus Floropoulos  :  "look at tsy prices over the last 30 days"
Gus Floropoulos  :  "profit taking only makes sense here"
Matthew Graham  :  "just now: RTRS - IMF SAYS HAS NOT BEEN IN DISCUSSION WITH GREECE ABOUT CHANGE IN DEBT FRAMEWORK"
Matthew Graham  :  "Earlier, Greek FinMin said in an interview that Greece had begun negotiations with IMF regarding debt swap."
Matthew Graham  :  "RTRS- REUTERS CONSENSUS FORECAST FOR ADP PAYROLL CHANGE FOR JAN WAS FOR INCREASE OF 225,000 JOBS"
Matthew Graham  :  "RTRS- ADP NATIONAL EMPLOYMENT REPORT SHOWS U.S. EMPLOYMENT INCREASED BY 213,000 PRIVATE SECTOR JOBS IN JANUARY"