It's a very simple, very awesome day so far for bond markets. The European Court of Justice news was great for peripheral nations (Italy, Spain, Portugal, Ireland, Greece), but still beneficial for core bond markets (mainly Germany). Treasuries followed Germany's gains to some extent overnight, but received a huge boost from an exceptionally weak Retail Sales report at 8:30am.
The combined move was so big that we can safely assume tradeflows and technicals have taken over. In other words, traders have contingency plans in place for various trading levels being hit. Some traders might treat a rally to a certain level as a cue to sell, while others might be forced to buy (to cover a bet on higher rates for instance).
On a technical note, 1.832 emerged as the post-rally ceiling in 10's. When/if this breaks, it could be a cue as to a shift in the trend.
On an MBS-specific note, Fannie 3.0s and Ginnie 3.0s are really the only 30yr coupons even making an attempt to keep pace with this rally. That's fine and dandy, considering they're primarily responsible for rate sheet changes. But even then, MBS are underperforming the big, volatile move, which is exactly what MBS always do during big, volatile moves (unless they arise due to things like QE3, which specifically targeted MBS). BUT EVEN THEN (to the previous 'even then'), rate sheets are still well into their best levels in 20 months--much better than yesterday (unless you're looking for jumbo money from Chase. They apparently ran out for today).
102-32 : +0-17
105-12 : +0-11
106-28 : +0-05
0.4850 : -0.0558
1.8070 : -0.0981
2.4120 : -0.0900
|Pricing as of 1/14/15 12:47PMEST|