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Treasury yields and Stocks have continued a mostly downward trajectory following the morning's first major Fiscal Cliff headline from Harry Reid. Since then, there has been a small barrage of Cliffy rumors, but the lack of clarity has ultimately benefited bond markets.

Fannie 3.0 MBS continue to grind against the same 104-29 high that began at 11am, and positive reprices have started trickling in. As MBS continue to hold or improve upon these levels, reprices continue to be possible.

As for the Cliff headlines, Senator Scott Brown's Facebook page indicated that he'd "just learned the Pres. reached out to Senate GOP leadership with a proposal. It is the first such proposal to be put forth."

CNN added that Obama told Mitch McConnell that he'd send the Senate a scaled-back proposal, ostensibly corroborating Brown's Facebook page, but shortly thereafter, John Harwood (CNBC) said via Twitter:

"Sr. WH official tells me that, contrary to reports from Repubs, president will NOT be sending a fiscal cliff proposal to Capitol Hill."

More from MND:

• MBS Commentary: MBS RECAP: Light Volume Stability Falls Victim to Headlines
• Mortgage Rate Watch: Mortgage Rates Slightly Higher; Anticipation Building for Fed
• MBS Commentary: MBS MID-DAY: Eerily Calm Start to FOMC Week
• MND NewsWire: Builder Confidence Soars. Sharpest Rise Since 2002
• Pipeline Press: Eminent Domain; More on Mini Correspondent; Deducting Mortgage Interest; The Popularity of 15-yr Refis

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