Bonds Push Back After Weaker Start on Tax Bill Passage


Friday evening brought the passage of the Senate’s version of the tax bill.  It now moves to a joint session for “reconciliation” (Senate+House trying to craft a final bill before Christmas).  As noted in the Day Ahead, unless lawmakers opt to cut their vacations short (which is very uncommon, but technically possible), “by Christmas” means “within 2 weeks.”  

Bonds have done quite a lot to price-in the effects of a tax bill (by moving higher in yield since September) and only had a little more selling to do in honor of the Senate’s official vote.  Friday’s Flynn news was mostly traded by the close of business.

The weakness was primarily seen right out of the gate (i.e. early in the overnight session), with the rest of the session being devoted to a gentle, but determined push back toward unchanged levels.  Late day stock market weakness seemed to help, but notably, bonds were already willing to hold certain ceilings this morning, even as stocks moved higher at the open.

MBS outperformed Treasuries, ending the day just barely into positive territory.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.


FNMA 3.5

102-22 : +0-01


10 YR

2.3740 : +0.0110

Pricing as of 12/4/17 5:00PMEST

Today’s Reprice Alerts and Updates

10:47AM  :  Bonds Confirm Disinterest in Data; MBS Outperform

MBS Live Chat Highlights

John Tassios  :  “very nice turnaround on TSY’s / MBS. Last night looked very ominous in Asia trading.”

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