Bond markets were mixed overnight with European yields rising slightly and US yields falling slightly.  This could be chalked up, rather simply, to the fact that Europe took their biggest hit with last Wednesday's ECB announcement.  As such, they didn't have the same sort knee-jerk sell-off as Treasuries on NFP Friday.  The extra Friday weakness left Treasuries with a bit of room to consolidate in a positive direction (read: lower yields).  German Bunds, meanwhile, were already near their post ECB lows by Friday, suggesting any consolidation should come in the form of slightly higher yields.  Long story short, both are doing what they need to do in order to consolidate. 

2015-6-8 Consolidating

Unless something exciting and different happens in the next few days, this consolidation is just a smaller version of the broad consolidation that took place in the month of May.  Then, as now, the risk was that we were seeing a "bull pennant" in yields.

Adding to the sense of consolidation today, 10yr yields bottomed out at 2.366.  If you're into technical levels, that's fairly terrifying.  It was Friday's post-NFP low.  It was the closing mark on ECB Wednesday, and it was the highest intraday level reached during May's selling spree (on 5/12).

Bottom line: today is green and ominous so far.


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
99-15 : +0-08
FNMA 3.5
103-01 : +0-07
FNMA 4.0
105-28 : +0-05
Treasuries
2 YR
0.7010 : -0.0160
10 YR
2.3900 : -0.0194
30 YR
3.1080 : -0.0073
Pricing as of 6/8/15 12:42PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:39AM  :  Slow Morning; Bonds Drifting Inside Post-NFP Range

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ira Selwin  :  "Sept 14th"
Jon Bodan  :  "hey guys, do you know when the new FHA rules go into effect regarding student loan deferred payments?"
Matthew Graham  :  "Important caveat on technicals right now. I've never cared less about pivots, inflection points, and technical studies than I do right now. I could write a whole piece on it, but the short version is that everything from 2.34 to 2.47 is one, gigantic, historical inflection zone. And the closing highs from mid May have arguably extended that to 2.28 on the low side. So anything that happens in between is fairly inconsequential. If you want a short term target to feel good about breaking, May's intraday high and the highest closing level before last Friday was 2.366. But again, we're frying bigger fish, and a one-day break of any level doesn't really mean anything to me until the bigger-picture break or bounce takes shape."
Frank Hanna  :  "MG is there any temporary "line in the sand" number that wed like to close below today?"
Jeff Anderson  :  "GM, all. Great work, MG. Very interesting. Definite good conversation to be had. I do think QE1 kept us out of the Abyss, possibly, but with the other 2 "reflation" hasn't held giving critics ammo to hammer the Fed. Again, interesting stuf, MG. Thanks"
Christopher Stevens  :  "MG- fantastic WA. The unknown is always scary. "
Matt Hodges  :  "wow; amazing chart and research that went into it, MG"
Matthew Graham  :  "
A new 'Week Ahead' has been issued:
Why It's So Scary"