Housing Starts and Building Permits fell in February.

Housing Starts moved 5.9% lower to 575,000 annualized units, almost erasing the 6.6% gain seen in January. While this was a poor print for housing starts, the market was expecting worse...hence this is easier for traders to shrug off. Building Permits were 1.6% weaker in February at an annualized rate of 612,000. This follows a 4.7% decline in January but was essentially "on the screws" as forecasts called for an annualized pace of 610,000 permits. So again....crappy data, but not worse than anticipated. 

Looking a little deeper, most of the weakness in Housing Starts was a in mutli-family. SFRs barely budged while multi-unit fell from 109k units in Jan to 76k units in Feb. The same can be said about Building Permits...Single-family stagnates while multifamily goes in the john.

Import Prices fell 0.3% in February thanks to a dip in crude oil and other petroleum products. This was the first month over month (MoM) price decline since July...but still in-line with forecasts which called for a 0.2% drop.

Export Prices moved 0.5% lower in February. This was much worse than economist expectations for a read of +0.3%. Price deflation was led by a 3.8% drop in agricultural exports and a 3.8% fall in food, feed, and beverages. 

In very low overnight trading volume, 10 year note yields moved higher before turning the tide at 7AM.  After the BETTER THAN EXPECTED data (haha come on), the 3.625% coupon bearing 10 year TSY note yield continues to tick a bit lower.

 The same thing goes for the FN 4.5. We opened lower in price and have since recovered. The FN 4.5 is currently trading flat at 100-28.

 In the bigger picture, the 10 year note range continues to narrow ahead of the FOMC Statement.

"Rate sheet influential" MBS coupons haven't much progress in either direction.

The dollar is weaker, oil prices are higher, the yield curve is flatter, and stocks are in the green.  This is all occurring with minimal participation from traders though. Volume is expectedly low ahead of what may be a market moving Fed statement at 2:15pm.

REPRICES FOR THE BETTER AT 101-04

REPRICES FOR THE WORSE AT 100-22