MBS and Treasuries continued into positive territory both before and after the Consumer Confidence data at 10am.  The headline was slightly weaker than expected, but the employment and 'present situation' readings were stronger.  Keep in mind that a stronger present situation is exactly what we were looking for in terms of economic data that might be able to transcend the 'weather' argument. 

In that sense, the present situation reading legitimizes the headline, and with the headline being about 2 points weaker than expected (more importantly, the 'expectations' component was down 5 points), we FINALLY have a piece of data that captures some sense of economic reality.  It suggests "moderate weakness," and bond markets reacted accordingly by moving to their strongest levels in 4 sessions.

Consumer Confidence

• 78.1 vs 80.0 forecast, 79.4 previously
• present situation 81.7 vs 77.3 previously
• expectations 75.7 vs 80.8 previously
• 'jobs hard to get' 32.5 vs 32.7 previously

Treasuries are down 4bps to 2.71 (10yr yield) and MBS are now up 8 ticks to 104-15 (Fannie 4.0).  There are no other significant reports today.

The two main home price reports are out just now.  Here's a run down of each:

Case Shiller Home Prices

• Seasonally adjusted +0.8 vs +0.6 forecast (was +0.9 in November)
• Non-adjusted -0.1 vs -0.1 in Nov
• +13.4 year-over-year vs +13.3 forecast

FHFA Home Prices

• Seasonally adjusted +0.8 vs -0.1 in Nov
• Year-over-year +7.7

Here's a chart with both indices:

Even before any of this morning's economic data, bond markets are picking up some steam as domestic trading gets underway.  Treasuries stayed flat during Asian hours and just barely followed core sovereign debt (Germany, UK, etc.) during European hours.  That ultimately resulted in 8am levels that were within 1bp of yesterday's latest.  MBS opened 2 ticks higher.

Since then, both MBS and Treasuries have seen tradeflow-based gains.  Domestic accounts have been better buyers from the outset, even before the 820am CME open.  That's unusual.  It's more common to see these nice little gluts of pre-data momentum take shape at or after 820am. 

That said, 820am brought more volume and positivity to the table.  10's just moved down to a 3bp yield gain on the morning, currently 2.719.  Fannie 4.0s are 6 ticks higher at 104-013.  House price data is coming up right now.

MBS and Treasuries continued into positive territory both before and after the Consumer Confidence data at 10am.  The headline was slightly weaker than expected, but the employment and 'present situation' readings were stronger.  Keep in mind that a stronger present situation is exactly what we were looking for in terms of economic data that might be able to transcend the 'weather' argument. 

In that sense, the present situation reading legitimizes the headline, and with the headline being about 2 points weaker than expected (more importantly, the 'expectations' component was down 5 points), we FINALLY have a piece of data that captures some sense of economic reality.  It suggests "moderate weakness," and bond markets reacted accordingly by moving to their strongest levels in 4 sessions.

Consumer Confidence

• 78.1 vs 80.0 forecast, 79.4 previously
• present situation 81.7 vs 77.3 previously
• expectations 75.7 vs 80.8 previously
• 'jobs hard to get' 32.5 vs 32.7 previously

Treasuries are down 4bps to 2.71 (10yr yield) and MBS are now up 8 ticks to 104-15 (Fannie 4.0).  There are no other significant reports today.

The two main home price reports are out just now.  Here's a run down of each:

Case Shiller Home Prices

• Seasonally adjusted +0.8 vs +0.6 forecast (was +0.9 in November)
• Non-adjusted -0.1 vs -0.1 in Nov
• +13.4 year-over-year vs +13.3 forecast

FHFA Home Prices

• Seasonally adjusted +0.8 vs -0.1 in Nov
• Year-over-year +7.7

Here's a chart with both indices:

Even before any of this morning's economic data, bond markets are picking up some steam as domestic trading gets underway.  Treasuries stayed flat during Asian hours and just barely followed core sovereign debt (Germany, UK, etc.) during European hours.  That ultimately resulted in 8am levels that were within 1bp of yesterday's latest.  MBS opened 2 ticks higher.

Since then, both MBS and Treasuries have seen tradeflow-based gains.  Domestic accounts have been better buyers from the outset, even before the 820am CME open.  That's unusual.  It's more common to see these nice little gluts of pre-data momentum take shape at or after 820am. 

That said, 820am brought more volume and positivity to the table.  10's just moved down to a 3bp yield gain on the morning, currently 2.719.  Fannie 4.0s are 6 ticks higher at 104-013.  House price data is coming up right now.