MBS RECAP: Bond Markets Utterly Rocked by THIS Central Banker (Not The One You Think)

By: Matthew Graham

It was Draghi! Not Yellen!

You know me (maybe?).  I hate those cheesy headlines with the "THIS" that alludes to what the headline should have just told you in the first place.  But today was such a wonderful example of misdirection for the average financially savvy consumer (and even many working in some financial capacity). 

Almost everyone with an opinion on the matter will chalk at least some of today's market movement up to Janet Yellen's congressional testimony.  After all, we had a big market move and the Fed chief was speaking before the Joint Economic Committee in a way that basically confirmed the December rate hike.  It had to be Yellen, right?

Without exaggeration or the least bit of uncertainty, I can tell you that Yellen was an utter and complete non-event today.  She had absolutely nothing to do with the conflagration on trade screens.  It was all Draghi, all the time, early, often, over the river (which is red), and through the woods (also red), with a cherry on top (the cherry was more of a vermilion, but due to rounding, it's technically also red).

What did Draghi do?  I'm saving the answer for tomorrow morning's Day Ahead to give us something to pass the time ahead of NFP.  If you can't wait, the short answer is that Draghi took away the punch bowl in totally unexpected way, and in an intraday environment that allowed us to observe the ECB news in relative isolation.  Believe me, I know how weird "isolation" sounds on this busy week and with Yellen speaking on the same day, but it happened, and there's plenty of hard evidence that will be in tomorrow morning's notes. 

Between now and then, there's also the new Housing Newsletter.  I know the guy that writes this. Bit wordy, but it covers the important bases.


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
99-26 : -0-25
FNMA 3.5
103-02 : -0-21
FNMA 4.0
105-25 : -0-13
Treasuries
2 YR
0.9430 : +0.0050
10 YR
2.2890 : +0.1110
30 YR
3.0340 : +0.1270
Pricing as of 12/3/15 10:02PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:20PM  :  ALERT ISSUED: Negative Reprices Now Guaranteed; Many Lenders Back for 2nds
11:44AM  :  ALERT ISSUED: All Lenders Now At Some Risk of Negative Reprices
11:04AM  :  ALERT ISSUED: Additional Negative Reprice Risk
9:42AM  :  ALERT ISSUED: Negative Reprices Can't be Ruled Out
8:56AM  :  ALERT ISSUED: Bonds Under Pressure as Draghi Disappoints

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "days like today make me wonder why anyone would ever give up MBS Live to save 38/mo."
Nathan Miller  :  "very helpful info in the newsletter with regards to the uptick, nice work senor Graham"