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FNMA 3.5
103-13 : +0-04
FNMA 4.0
105-07 : +0-02
FNMA 4.5
106-15 : +0-02
FNMA 5.0
107-31 : +0-01
GNMA 3.5
104-32 : +0-04
GNMA 4.0
107-27 : +0-01
GNMA 4.5
108-31 : -0-01
GNMA 5.0
110-14 : -0-01
103-06 : +0-04
104-30 : +0-03
106-06 : +0-03
107-21 : +0-01
Pricing as of 11:02 AM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
10:40AM  :  EU Finance Ministers to Sign Off on Greek Cash, Grill Spain
(Reuters) - Euro zone finance ministers will sign off on a second bailout for Greece on Monday and shift their focus to Spain, whose government looks set to violate newly agreed EU budget rules by missing its deficit target again this year.

Greece, the bloc's original problem debtor, swapped its privately held bonds at the weekend for new, longer maturity paper with less than half the nominal value, slashing more than 100 billion euros ($130 billion) from its debt.

The swap paves the way for euro zone ministers to give the final go-ahead to a 130-billion-euro package to finance Athens until 2014, after they decided on Friday that Greece - its economy shrunk by repeated austerity measures - had met all their conditions.

But as Greece's financial problems have lost some urgency, Spain has raised a new challenge. After announcing the previous government had missed its 2011 budget deficit target by a significant margin, the new administration added it would not meet the EU-agreed deficit goal for this year either.

"Spain will be subject to serious discussion today, both because of the method and the substance of their announcement," said one euro zone official involved in preparing for the ministers' discussions.

Full Story:
9:33AM  :  ALERT: 2 Steps Fwd, 1 Step Back For Bond Markets To Begin The Week
As expected, the trading day has been excruciatingly slow today. The culprit, apart from a natural predisposition for Mondays to be a bit more thinly traded than other days of the week is an exceptionally light economic calendar on an otherwise busy week.

With no meaningful data this morning, the best candidate to catch traders' fancy is the Fed's scheduled buying in the 30yr sector, beginning at 10:15, but with higher volume movement more likely occurring after it completes at 11:00am.

Beyond setting up for that, markets have been reacting somewhat to China reporting their biggest trade deficit since 1989. This helped fuel a bit of a bounce back from Friday's weakness, along with the general counterpoint arguments casting doubt on the efficacy of the Greek PSI along with the low volume.

All this leaves 10yr yields nearly 3bps better than Friday's close at 2.005 and Fannie 3.5 MBS up 5 ticks at 103-14. 10's were as low as 1.989 earlier this morning (hence the the "2 steps fwd") and MBS as high as 100-16 before retreating a bit since 9am ("1 step back").

Keep in mind that the auction cycle is a day early this week and we could see traders begin setting up for tomorrow's 10yr Notes today. The best candidate for volatility is the 11am completion of the scheduled Fed buying. If we weren't so determined not to be surprised by bond markets holding ranges, we'd probably be surprised to be seeing things trade so well this morning and a bit wary about that changing after 11am.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
Andy Pada  :  "Now 30 Year 105 - 125 LTV is pricing 60 bps worse than the regular 30 year"
Andy Pada  :  "Cash window priced the 30 Year 105 - 125 LTV about 40 bps better on Friday than the regular 30 Year."
Andy Pada  :  "Did anyone notice a blip in in 105 to 125 LTV pricing on Friday"
Matthew Graham  :  "3yr Auctions have been relatively inconsequential AP. Last 4 BTC's were 3.3, 3.73, 3.62, and 3.41. Yields will be the highest today since the 10/11 auction which saw a .544 high yield"
Andy Pada  :  "Is it too early to ask about previous auction #s?"
Jason York  :  "Wells is about .4 better on govies"
Matthew Graham  :  "More support for the stock lever notion now.... S&P's down 2 pts in the last 5 minutes and 10yr yields correct half a bp lower off their highs. The two are generally moving in the same direction this morning, which is not too surprising I guess, in light of the fact that there's not much else to trade and light volume."
Matthew Graham  :  "yeah. 24-30yr sector, 1015-11am"
Victor Burek  :  "fed buying today?"
Matthew Graham  :  "volume is light enough that it looks like the latest little blip of weakness is stock-lever-induced."
Jason York  :  "we should have some good pricing from those that didn't reprice Friday afternoon and from this morning"
Matthew Graham  :  "or maybe 102's. could go either way and still not constitute a major range break"
B-C  :  "maybe we see 104 by Friday"
Victor Burek  :  "have a feeling the auctions this week gonna be well received"
Victor Burek  :  "seems like a quiet morning for being up +6"
Andy Pada  :  "cash window about 15 bps better than Friday's close"
Victor Burek  :  "china's slowing, japans a mess, europes a mess, austrailia probably in recession"
Victor Burek  :  "usa data been pretty decent...yet 10yr under 2.00"
Victor Burek  :  "its all international"
Andy Pada  :  "VB, what are looking for in terms of news (domestic or international)?"
Victor Burek  :  "me too..but could be happier"
Andy Pada  :  "I'm happy in this range."
Victor Burek  :  "we will break the range higher, soon enough"
Andy Pada  :  "looks like we're at the top of our range (post roll)"