MBS Live: MBS MID-DAY
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FNMA 3.5
102-19 : +0-05
FNMA 4.0
104-23 : +0-03
FNMA 4.5
106-05 : +0-01
FNMA 5.0
107-26 : -0-02
GNMA 3.5
104-10 : +0-05
GNMA 4.0
107-04 : +0-04
GNMA 4.5
108-32 : +0-02
GNMA 5.0
110-18 : +0-02
FHLMC 3.5
102-14 : +0-05
FHLMC 4.0
104-18 : +0-04
FHLMC 4.5
105-22 : +0-01
FHLMC 5.0
107-07 : -0-02
Pricing as of 11:01 AM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
8:43AM  :  ECON: Consumer Price Index Unchanged, Core Slightly Higher
Consumer Prices in November were effectively unchanged, falling 0.019% versus a consensus of +0.1%. But excluding food and energy, the so-called Core CPI rose slightly faster than the expected 0.1% at a pace of 0.1731%. This brings the year-over-year headline CPI to +3.4% vs a +3.5% consensus and the Core to +2.2% vs a +2.1% consensus.

Energy prices fell, let by a 4.4% decline in natural gas, the biggest in a year. Gas prices fell 2.4% as well. Food, Housing, and Rent all increased 0.1%.

This report came in close enough to the consensus and has fallen far enough from its previous perch as one of the most anticipated economic indicators of the month, that we're seeing limited, but slightly positive reaction in bond markets. 10yr yields are down to 1.911 in the 10 minutes following the report. Fannie 3.5's shared in the positivity at first but just ticked down from 102-15 to 102-13. Trading in MBS is choppy and illiquid.
8:30AM  :  ALERT: Bond Markets Open Slightly Weaker on Uneventful Overnight Session
Last night was perhaps the least dramatic of the week in terms of the European headlines and events that we've all come to know and love as the primary source of domestic market movement. 10yr yields leaked slightly higher, but in a narrow range of 1.89 to 1.94 and currently sit at 1.918. Fannie 3.5's opened a few ticks weaker but have since clawed back to unchanged.

In the news, Italy's lower house passed a vote on their recently announced austerity measures, which now move to the senate. That could pass perhaps some time next week and could be a slight detractor of bond prices. The FT reports that the EFSF has prepared a "draft prospectus for the latest eurozone bail-out instruments" which includes "warnings to investors that the euro could break apart or even cease to be a lawful currency entirely." While this isn't really NEW news, the fact that the EFSF is considering making it part of their prospectus may raise a few eyebrows.

The only scheduled economic data today hits in moments with Consumer Prices. Beyond that, the Fed buybacks could see some strategic bets before and after, which could exaggerate price movement in what's expected to be a fairly light volume day the further along it goes.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
AQ  :  "MTGEs still coming off recent spread tights as fast$/total return books year-end profit and lock desks add hedges at price highs. #MBS CC at 3.063%. #SlowSession #FridayFlows. WHAT'S YOUR HEDGE RATIO?"
Matthew Graham  :  "RTRS- U.S. NOV CPI FOOD +0.1 PCT, HOUSING +0.1 PCT, OWNERS' EQUIVALENT RENT OF PRIMARY RESIDENCE +0.1 PCT "
Matthew Graham  :  "RTRS- U.S. NOV CPI ENERGY -1.6 PCT; GASOLINE -2.4 PCT; NATGAS -4.4 PCT, BIGGEST DROP IN 1 YEAR; NEW VEHICLES -0.3 PCT "
Matthew Graham  :  "RTRS- U.S. NOV CPI YEAR-OVER-YEAR +3.4 PCT (CONS +3.5 PCT), EXFOOD/ENERGY +2.2 PCT (CONS +2.1 PCT)"
Matthew Graham  :  "RTRS - U.S. NOV CPI UNCHANGED (-0.0190; CONSENSUS +0.1 PCT), EXFOOD/ENERGY +0.2 PCT (+0.1731; CONS +0.1 PCT) "
Victor Burek  :  "its friday, stocks poised to post some gains, volume probably gonna be extreme light..i will take a sideways day all day"
Tony Cardinal  :  "is there a driving notion of why your thoughts are lower, or mainly a guess?"
Victor Burek  :  "i'm thinkin we close about right here where we opened"
Matthew Graham  :  "I'll take the under"
Victor Burek  :  "hate to say it.but i take the under"
Tony Cardinal  :  "appears to b a quite econ day. over under on dending the day at 102.19 on the 3.5?"