• Brexit leads European panic
  • European panic leads bond yields lower
  • Europe gets their fill just after 10am and markets reverse
  • US bond markets bounce back after European close
  • Consumer Sentiment inflation expectations helped extend the rally just a bit

Be it Brexit fears or "global growth concerns," panic is in the air.  Panic has driven European yields to all-time lows for the past 4 days.  It has also pulled US bond market volume higher for the past 3 days.  Just today, it deposited 10yr yields at their lowest close in more than 3 years.  For what it's worth, you'd really have to go back to the summer of 2012 to see meaningfully lower rates.

Big banks and big investors have been raising the alarm in various ways (research reports, public statements, CNBC phone calls, etc.) about what might happen to them in the event of Brexit (we're talking about the UK exiting the European Union, by the way).  

The net effect is a massive run on global bond markets and a big, nasty sell-off in equities markets.  US bond markets were still riding the wave from European trading heading into 10am.  There, they found a small extra boost from the worst-ever read on the 5-yr consumer inflation outlook in the Consumer Confidence data.  

But Europe was done buying bonds for the day, and yields moved higher accordingly until Europe was simply done with trading for the day.  After that, Treasuries found their footing and rallied back toward the days stronger levels, but logically chose to remain inside the morning's trading range (typical Friday afternoon following a volatile morning session).

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
102-28 : +0-04
10 YR
1.6440 : -0.0360
Pricing as of 6/10/16 5:48PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:34PM  :  US Bond Markets Recover After European Close
1:01PM  :  ALERT ISSUED: Negative Reprice Risk Increasing
12:04PM  :  ALERT ISSUED: Heads-Up: Gains Fading
10:44AM  :  More New All-Time Lows in Overseas Bond Markets; Treasuries Like It

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "with reno policies at most lenders, why not lock at these rates?"
Steve Schneider  :  ""rates take the stairs down on the elevator up." My pain tolerance of risk in this low rate environment is quite low. just my opinion for what it's worth/cost."
Matthew Graham  :  "There's no wrong answer. 3-year lows in rates = never a bad time to lock. On the other hand, we are in a downtrend in rates, so some folks would wait until that trend ends before locking. The tradeoff is that you get to see more of the potential rally in exchange for losing some ground at the end of your floating period. I'd generally leave that up to client preference anyway."
Matt Hodges  :  "i've been locking all week, Sean... next week is FOMC, Brexit the week after"
Sean Goudreau  :  "Would you guys float through weekend or lock today?"