November has been a fairly rough month for MBS in terms...

(Reuters) - President Barack Obama accused a "handful of Republicans" in the House of Representatives on Friday of holding up legislation to extend tax cuts for middle-class Americans in order to try to preserve them for the wealthy.

"It's not acceptable to me and I don't think it's acceptable to you for just a handful of Republicans in Congress to hold middle-class tax cuts hostage simply because they don't want tax rates on upper income folks to go up," Obama said.

As can occasionally be the case, we saw a small but detectable blip of weakness following the 10:15-11:00 scheduled Fed buyback. The best look at the effects is in the 30yr Treasury chart (today's operation was the "long" version in 25-30yr maturities), and there was a bit of spillover to 10's and MBS.

But Fannie 3.0s are holding their ground thus far at 105-06 after having briefly dipped to 105-04. 10yr yields moved up to their high yields of the day at 1.6147 but have failed to break any higher.

- PMI 50.4 vs 50.5 consensus, 49.9 previous
- New Orders 45.3 vs 50.6 previous
- Prices Paid 70.1 vs 50.6 previous, highest since March
- New orders lowest since June 2009
- Employment Index 55.2 vs 50.3 previous

The Chicago Purchasing Managers reported November's Chicago Business Barometer improved to 50.4. After two consecutive months in contraction, the Business Barometer was led higher by advances in Production, Employment, and Supplier Deliveries while New Orders subtracted from economic activity.

BUSINESS ACTIVITY:
• PRICES PAID: 16 month high; EMPLOYMENT continues on pace with PRODUCTION;
  
• NEW ORDERS: lowest since June 2009;
• INVENTORIES: lowest since February 2010.

Despite a gradual drift higher in equities and the...

(Reuters) - Euro zone joblessness has reached a new high and the poor state of the economy is reducing inflation to near two-year lows, raising the prospect of further interest cuts by the European Central Bank.

As the euro zone sinks into its second recession since 2009, the number of people out of work in the euro zone rose by 173,000 people in October to almost 19 million people unemployed, the EU's statistics office Eurostat said on Friday.

That pushed joblessness to the highest level since the euro was introduced in 1999, at 11.7 percent of the working population, illustrating the human impact of a public debt and banking crisis that has reverberated across the world.

- Spending -0.2 pct vs 0.0 consensus
- First decline in spending since May
- Income 0.0 vs +0.2 consensus, weakest since April
- "Real" Consumer Spending -0.3 pct, most since Sept 2009

Personal income increased $0.4 billion, or less than 0.1 percent, and disposable personal income (DPI) increased $0.8 billion, or less than 0.1 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $20.2 billion, or 0.2 percent. In September, personal income increased $47.8 billion, or 0.4 percent, DPI increased $42.1 billion, or 0.4 percent, and PCE increased $84.0 billion, or 0.8 percent, based on revised estimates.

Real disposable income decreased 0.1 percent in October, compared with an increase of less than 0.1 percent in September. Real PCE decreased 0.3 percent, in contrast to an increase of 0.4 percent.

Personal outlays -- PCE, personal interest payments, and personal current transfer payments -- decreased $18.0 billion in October, in contrast to an increase of $87.3 billion in September. PCE decreased $20.2 billion, in contrast to an increase of $84.0 billion.

(Reuters) - President Barack Obama accused a "handful of Republicans" in the House of Representatives on Friday of holding up legislation to extend tax cuts for middle-class Americans in order to try to preserve them for the wealthy.

"It's not acceptable to me and I don't think it's acceptable to you for just a handful of Republicans in Congress to hold middle-class tax cuts hostage simply because they don't want tax rates on upper income folks to go up," Obama said.

(Reuters) - Euro zone joblessness has reached a new high and the poor state of the economy is reducing inflation to near two-year lows, raising the prospect of further interest cuts by the European Central Bank.

As the euro zone sinks into its second recession since 2009, the number of people out of work in the euro zone rose by 173,000 people in October to almost 19 million people unemployed, the EU's statistics office Eurostat said on Friday.

That pushed joblessness to the highest level since the euro was introduced in 1999, at 11.7 percent of the working population, illustrating the human impact of a public debt and banking crisis that has reverberated across the world.

November has been a fairly rough month for MBS in terms...

(Reuters) - President Barack Obama accused a "handful of Republicans" in the House of Representatives on Friday of holding up legislation to extend tax cuts for middle-class Americans in order to try to preserve them for the wealthy.

"It's not acceptable to me and I don't think it's acceptable to you for just a handful of Republicans in Congress to hold middle-class tax cuts hostage simply because they don't want tax rates on upper income folks to go up," Obama said.

As can occasionally be the case, we saw a small but detectable blip of weakness following the 10:15-11:00 scheduled Fed buyback. The best look at the effects is in the 30yr Treasury chart (today's operation was the "long" version in 25-30yr maturities), and there was a bit of spillover to 10's and MBS.

But Fannie 3.0s are holding their ground thus far at 105-06 after having briefly dipped to 105-04. 10yr yields moved up to their high yields of the day at 1.6147 but have failed to break any higher.

- PMI 50.4 vs 50.5 consensus, 49.9 previous
- New Orders 45.3 vs 50.6 previous
- Prices Paid 70.1 vs 50.6 previous, highest since March
- New orders lowest since June 2009
- Employment Index 55.2 vs 50.3 previous

The Chicago Purchasing Managers reported November's Chicago Business Barometer improved to 50.4. After two consecutive months in contraction, the Business Barometer was led higher by advances in Production, Employment, and Supplier Deliveries while New Orders subtracted from economic activity.

BUSINESS ACTIVITY:
• PRICES PAID: 16 month high; EMPLOYMENT continues on pace with PRODUCTION;
  
• NEW ORDERS: lowest since June 2009;
• INVENTORIES: lowest since February 2010.

Despite a gradual drift higher in equities and the...

(Reuters) - Euro zone joblessness has reached a new high and the poor state of the economy is reducing inflation to near two-year lows, raising the prospect of further interest cuts by the European Central Bank.

As the euro zone sinks into its second recession since 2009, the number of people out of work in the euro zone rose by 173,000 people in October to almost 19 million people unemployed, the EU's statistics office Eurostat said on Friday.

That pushed joblessness to the highest level since the euro was introduced in 1999, at 11.7 percent of the working population, illustrating the human impact of a public debt and banking crisis that has reverberated across the world.

- Spending -0.2 pct vs 0.0 consensus
- First decline in spending since May
- Income 0.0 vs +0.2 consensus, weakest since April
- "Real" Consumer Spending -0.3 pct, most since Sept 2009

Personal income increased $0.4 billion, or less than 0.1 percent, and disposable personal income (DPI) increased $0.8 billion, or less than 0.1 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $20.2 billion, or 0.2 percent. In September, personal income increased $47.8 billion, or 0.4 percent, DPI increased $42.1 billion, or 0.4 percent, and PCE increased $84.0 billion, or 0.8 percent, based on revised estimates.

Real disposable income decreased 0.1 percent in October, compared with an increase of less than 0.1 percent in September. Real PCE decreased 0.3 percent, in contrast to an increase of 0.4 percent.

Personal outlays -- PCE, personal interest payments, and personal current transfer payments -- decreased $18.0 billion in October, in contrast to an increase of $87.3 billion in September. PCE decreased $20.2 billion, in contrast to an increase of $84.0 billion.

- PMI 50.4 vs 50.5 consensus, 49.9 previous
- New Orders 45.3 vs 50.6 previous
- Prices Paid 70.1 vs 50.6 previous, highest since March
- New orders lowest since June 2009
- Employment Index 55.2 vs 50.3 previous

The Chicago Purchasing Managers reported November's Chicago Business Barometer improved to 50.4. After two consecutive months in contraction, the Business Barometer was led higher by advances in Production, Employment, and Supplier Deliveries while New Orders subtracted from economic activity.

BUSINESS ACTIVITY:
• PRICES PAID: 16 month high; EMPLOYMENT continues on pace with PRODUCTION;
  
• NEW ORDERS: lowest since June 2009;
• INVENTORIES: lowest since February 2010.

- Spending -0.2 pct vs 0.0 consensus
- First decline in spending since May
- Income 0.0 vs +0.2 consensus, weakest since April
- "Real" Consumer Spending -0.3 pct, most since Sept 2009

Personal income increased $0.4 billion, or less than 0.1 percent, and disposable personal income (DPI) increased $0.8 billion, or less than 0.1 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $20.2 billion, or 0.2 percent. In September, personal income increased $47.8 billion, or 0.4 percent, DPI increased $42.1 billion, or 0.4 percent, and PCE increased $84.0 billion, or 0.8 percent, based on revised estimates.

Real disposable income decreased 0.1 percent in October, compared with an increase of less than 0.1 percent in September. Real PCE decreased 0.3 percent, in contrast to an increase of 0.4 percent.

Personal outlays -- PCE, personal interest payments, and personal current transfer payments -- decreased $18.0 billion in October, in contrast to an increase of $87.3 billion in September. PCE decreased $20.2 billion, in contrast to an increase of $84.0 billion.