Quick update on the post-auction trading... After the initial knee-jerk to the lows of the day, MBS bounced back to pre-auction levels and did a fair job of holding those for about half an hour. Both Treasuries and MBS broke support at 1:40 and ticked just slightly lower in price to the weakest levels of the day.

Even now, we've seen another mini-bounce keeping hope alive that 102-19 will prove to be a temporary low with 102-20 holding as the predominant Fannie 3.0 support for the day. 10yr yields topped out at 2.033 and are currently down to 2.0205.

Bottom line, reprice risk remains in sort of equivocal territory and we remain hopeful that post-auction weakness (minus the 1 tick to 102-19) holds its ground at 102-20.

Regarding reprice potential, many lenders priced conservatively and the outright change in prices vs rate sheet time doesn't justify an adjustment to those prices. The only risk is the negativity in the trend since 11:30 and the current indecision at/near the lows. To whatever extent this second bounce back attempt has legs, the more we can pull away from reprice risk.

Those possibilities look dependent on stocks for now. Equities markets are currently down a few points (S&P) after hitting overhead pivot resistance in line with the morning lows. This seems to be helping bond markets dig their heels in a bit.

A QUICK note for those about to lock... MBS just hit...

The last 4 auctions have alternated between higher...

As-expected Retail Sales data is had been helping to...

- Headline Sales +0.1 vs +0.1 Consensus, +0.5 Previous
- Excluding Gasoline +0.1 vs +0.8 Previous
- Gasoline +0.2 vs -1.7 Previous
- Cars/Parts -0.1 vs +1.2 Previous

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $416.6 billion, an increase of 0.1 percent (±0.5%)* from the previous month and 4.4 percent (±0.7%) above January 2012. Total sales for the November 2012 through January 2013 period were up 4.5 percent (±0.5%) from the same period a year ago. The November to December 2012 percent change was unrevised from +0.5 percent (±0.3%).

Retail trade sales were up 0.1 percent (±0.5%)* from December 2012 and 4.1 percent (±0.8%) above last year. Nonstore retailers were up 15.7 percent (±2.3%) from January 2012 and auto and other motor vehicle dealers were up 9.4 percent (±2.3%) from last year.

Quick update on the post-auction trading... After the initial knee-jerk to the lows of the day, MBS bounced back to pre-auction levels and did a fair job of holding those for about half an hour. Both Treasuries and MBS broke support at 1:40 and ticked just slightly lower in price to the weakest levels of the day.

Even now, we've seen another mini-bounce keeping hope alive that 102-19 will prove to be a temporary low with 102-20 holding as the predominant Fannie 3.0 support for the day. 10yr yields topped out at 2.033 and are currently down to 2.0205.

Bottom line, reprice risk remains in sort of equivocal territory and we remain hopeful that post-auction weakness (minus the 1 tick to 102-19) holds its ground at 102-20.

Regarding reprice potential, many lenders priced conservatively and the outright change in prices vs rate sheet time doesn't justify an adjustment to those prices. The only risk is the negativity in the trend since 11:30 and the current indecision at/near the lows. To whatever extent this second bounce back attempt has legs, the more we can pull away from reprice risk.

Those possibilities look dependent on stocks for now. Equities markets are currently down a few points (S&P) after hitting overhead pivot resistance in line with the morning lows. This seems to be helping bond markets dig their heels in a bit.

A QUICK note for those about to lock... MBS just hit...

The last 4 auctions have alternated between higher...

As-expected Retail Sales data is had been helping to...

- Headline Sales +0.1 vs +0.1 Consensus, +0.5 Previous
- Excluding Gasoline +0.1 vs +0.8 Previous
- Gasoline +0.2 vs -1.7 Previous
- Cars/Parts -0.1 vs +1.2 Previous

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $416.6 billion, an increase of 0.1 percent (±0.5%)* from the previous month and 4.4 percent (±0.7%) above January 2012. Total sales for the November 2012 through January 2013 period were up 4.5 percent (±0.5%) from the same period a year ago. The November to December 2012 percent change was unrevised from +0.5 percent (±0.3%).

Retail trade sales were up 0.1 percent (±0.5%)* from December 2012 and 4.1 percent (±0.8%) above last year. Nonstore retailers were up 15.7 percent (±2.3%) from January 2012 and auto and other motor vehicle dealers were up 9.4 percent (±2.3%) from last year.

- Headline Sales +0.1 vs +0.1 Consensus, +0.5 Previous
- Excluding Gasoline +0.1 vs +0.8 Previous
- Gasoline +0.2 vs -1.7 Previous
- Cars/Parts -0.1 vs +1.2 Previous

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $416.6 billion, an increase of 0.1 percent (±0.5%)* from the previous month and 4.4 percent (±0.7%) above January 2012. Total sales for the November 2012 through January 2013 period were up 4.5 percent (±0.5%) from the same period a year ago. The November to December 2012 percent change was unrevised from +0.5 percent (±0.3%).

Retail trade sales were up 0.1 percent (±0.5%)* from December 2012 and 4.1 percent (±0.8%) above last year. Nonstore retailers were up 15.7 percent (±2.3%) from January 2012 and auto and other motor vehicle dealers were up 9.4 percent (±2.3%) from last year.