Mortage Backed Secuties prices are up +3/32 which is about 7/32 higher than yesterday at this time. The 30-yr fixed FNMA required net yield (60 day) is now at 3.37%, from 3.38% yesterday. There was little reaction to today’s economic data. Weekly Jobless Claims fell to 367K, slightly below the consensus of 370K. Productivity came in at 0.7%, which was very close to expectations. The Dow is up 10 points. No more economic data will be released today.

Mortgage Backed Security prices are up +6/32(FNMA 30-yr 3.5 at 103.28) above morning pricing around unchanged levels, and near the high for the day. Favorable repricing took place. Consumer Confidence fell to 61.1, below the consensus of 67.0. Chicago PMI also fell short of expectations. The Dow is down 20 points. Tomorrow, ADP Employment, Construction Spending, and ISM Manufacturing will be released.

Mortgage Backed Securities (MBS) prices are down -9/32 (FNMA 30-yr 3.5 at 102.23) below 9:45 et pricing around -2/32, and near the low for the day. Unfavorable repricing took place. This week, investors have become less concerned about Europe and more optimistic about the US economic outlook, so US bond markets have moved lower. Today, Jobless Claims fell to the lowest level since April 2008. The Philly Fed index came in lower than expected. The Dow is up 50 points. Tomorrow, Existing Home Sales will be released at 10:00 et.

Reports that S&P is close to downgrading several European countries has lifted the Mortgage Backed Securities markets and hurt the stock market this morning. In the US, Consumer Sentiment jumped to 74.0, above the consensus of 71.0, and the highest level since May. December Import Prices declined 0.1% from November. The November Trade Deficit was larger than expected. The Dow is down 100 points. No more economic data will be released today.

Mortgage Backed Security prices are up +1/32 (FNMA 30-yr 3.5 at 102.31), which is about 5/32 higher than yesterday at this time. Favorable repricing took place yesterday. The 30-yr fixed FNMA required net yield (60 day) is now at 3.48%, the lowest level since October 4, from 3.52% yesterday. Early investors may have priced at higher levels.

Weaker than expected economic data was unable to provide much improvement for MBS markets this morning. December Retail Sales rose 0.1% from November, below the consensus of 0.4%. Retail Sales ex-autos fell 0.2%, the first monthly decline since May 2010. Weekly Jobless Claims rose to 399K, above the consensus of 375K. The four-week average increased to 382K. As expected, the European Central Bank (ECB) made no change in rates. The Dow is down 10 points. No more economic data will be released today. The results from the 30-yr Treasury auction will come out around 1:00 et.

MBS prices are down -4/32 (FNMA 30-yr 3.5 at 101.26), above 9:45 et pricing of -5/32, but down from a high of +3/32. Favorable repricing took place. A rate cut by China, stronger than expected US economic data, and a joint program by major central banks to lower bank borrowing costs produced a large stock market rally and a decline in bonds. September Pending Home Sales rose 10% from August, which was far above the consensus forecast. Note that Pending Home Sales measure contract signings and not closings. The Fed’s Beige Book reported slow or moderate economic growth in 11 out of 12 US regions. The Dow is up 480 points. Tomorrow, Jobless Claims, ISM manufacturing, and Construction Spending will be released.

This morning the Census reported October Housing Starts, Building Permits, and Home Completions data. The absolute (unadjusted) number of housing starts decreased 6%, while single-family (SF) starts decreased 2% M/M. Both were modestly below October’s historical seasonal monthly increase of 1-3%. Total and SF permits decreased 1% and 4% M/M, total completions decreased 5%, and SF completions increased 10.5%

Mortgage prices are unchanged. Increased optimism about Italy outweighed rising bond yields in Spain and France. The new Italian Prime Minister suggested that the newly formed governing body may be in place sooner than expected, allowing them to begin the reform process. Today’s US economic data had little impact on MBS markets. Comments from Fed officials displayed the division over what the Fed should do. The Fed’s Evans, the official most strongly in favor of looser monetary policy, argued that the Fed should ease further to help lower the unemployment rate. The Fed’s Bullard took the opposite position, focusing on the risk of higher inflation from additional monetary stimulus. The Dow was up 20 points. Tomorrow, CPI and Industrial Production will be released

Mortgage Backed Security (MBS) prices are up +15/32 (FNMA 30-yr 3.5 at 101.14), which is about 22/32 higher than Friday at this time. A decline in the stock market has lifted MBS this morning. Chicago PMI declined to 58.4, below the consensus forecast of 59.0, and the lowest level since May. The Dow is down 150 points. No more economic data will be released today. Of note, there will be a Fed meeting on Wednesday, and the Employment report will come out on Friday.

Mortgage Backed Securities (MBS) prices are up +11/32 (FNMA 30-yr 3.5 at 100.26), which is about 1/32 lower than yesterday at this time. The 30-yr fixed FNMA required net yield (60 day) is now at 3.84%, the highest level since August 25, from 3.78% yesterday.

MBS markets have recovered roughly half of yesterday’s losses this morning. The September Core PCE price index, an inflation indicator closely watched by the Fed, was unchanged from August, compared to the consensus forecast for an increase of 0.1%. Core PCE was a moderate 1.6% higher than one year ago. September Personal Income rose 0.1%, which was lower than expected.