MBS RECAP: Bond Markets Battle Back After Europe Closes

By: Matthew Graham

It's getting to be quite a miraculous thing--the extent to which market participants have been attempting to manipulate every little Greek headline.  More miraculous still, is the market's willingness to react to Greece-related headlines, even if only slightly.

Today was such a day.  After leveling off into the European closing hours, bond markets were hit by a headline about a Greek debt deal.  It caused a quick pop higher in yields before traders realized it was nothing more than just another lemming stampede that began with an otherwise uninteresting article.  Most hilarious was the fact that the article was written in German for a German newspaper, but all it takes is one twitter user to google-translate and retype in all-caps. 

GREEK AID TO BE EXTENDED TO YEAR-END -GERMAN PAPER

What does that even mean?  No one knew, but they assumed it meant something good for Greece and bad for the rest of the bond market.  That's evident in the chart below, as is the fact that the European session generally pushed yields higher and US traders got back to business after Europe closed. 


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
99-24 : +0-01
FNMA 3.5
103-06 : +0-02
FNMA 4.0
106-01 : +0-02
Treasuries
2 YR
0.6410 : -0.0160
10 YR
2.3340 : +0.0140
30 YR
3.1300 : +0.0330
Pricing as of 6/18/15 4:16PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:26PM  :  ALERT ISSUED: Negative Reprice Risk Increasing Again
10:39AM  :  ALERT ISSUED: Negative Reprice Risk Increasing as Morning Weakness Continues
10:05AM  :  Philly Fed Beat Adds to Negative Morning Momentum

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS - GERMAN NEWSPAPER ZEIT REPORT ABOUT CONCESSIONS MADE TO GREECE BY CREDITORS HAS NOTHING TO DO WITH REALITY, SUCH A PROPOSAL WOULD DEFINITELY NOT FLY - EU DIPLOMATS"
Victor Burek  :  "the denials never move the markets back to where they were"
Matthew Graham  :  "and the denial is in... MERKEL SAYS ONLY KNOWS OF OFFER FROM GREEK CREDITORS"
Victor Burek  :  "no denials yet?"
Matthew Graham  :  "for all we know, it's some op-ed in this morning's print edition of the paper."
Matthew Graham  :  "nothing happened in Greece or anywhere else. All that happened is that some opportunistic traders pushed the news in a German paper in order to temporarily juice markets for fun and profit."
Jeff Anderson  :  "Don't they just use the same headlines but change the date?"
Victor Burek  :  "would be big news if EU caved to Greece"
Matthew Graham  :  "not sure if that's the causality here, but something is up"
Matthew Graham  :  "German newspaper report circulating regarding Greek aid being extended to year end. "