MBS Live: MBS Morning Market Summary
Things have been mostly weaker for MBS this morning, but only moderately so.  Fannie 3.0s ratcheted down to 104-16 after opening up just below the bulk of yesterday's trading range makding for a 5/32nds day-over-day loss overall.  10yr yields made a similar weak-but-not-awful move this morning, trading between 1-3 bps weaker.  That said, the weakness seems relatively contained so far, and that should continue to be the case as markets wait for any potential surprises from the 5yr auction results and the FOMC Announcement. 
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
104-15 : -0-06
FNMA 3.5
106-06 : -0-04
FNMA 4.0
107-00 : -0-01
FNMA 4.5
107-28 : -0-01
GNMA 3.0
105-29 : -0-06
GNMA 3.5
108-12 : -0-04
GNMA 4.0
109-07 : +0-00
GNMA 4.5
108-22 : -0-03
104-09 : -0-06
105-32 : -0-04
106-19 : -0-01
107-06 : -0-01
Pricing as of 11:08 AM EST
Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this morning.

10:11AM  :  ECON: New Home Sales Roughly In Line With Expectations
Sales of new single-family houses in September 2012 were at a seasonally adjusted annual rate of 389,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 5.7 percent (±14.8%)* above the revised August rate of 368,000 and is 27.1 percent (±19.3%) above the September 2011 estimate of 306,000.

The median sales price of new houses sold in September 2012 was $242,400; the average sales price was $292,400. The seasonally adjusted estimate of new houses for sale at the end of September was 145,000. This represents a supply of 4.5 months at the current sales rate.
9:47AM  :  ALERT ISSUED: Data And Headlines Arrive In A Flurry, Bond Markets Slightly Weaker
FHFA's report on home prices isn't necessarily a major market mover, but perhaps the fact that it joined the recently growing ranks of data that was "released early," in some way foreshadowed the hectic and relatively fast pace of overnight and early morning developments. Granted, most of the data was scheduled, but taken together with the surprises, it's painted a clear picture of a significantly more active session overnight and into the domestic hours.

On the unscheduled front, today's 'biggie' would seem to be Greece getting a 2yr extension on meeting creditors' budget targets, pushing the deadline into 2016, though the scheduled events seem to have done more to move markets overnight.

Stronger manufacturing in China had bond markets under pressure at the beginning of the overnight session, but Treasuries came roaring back around 4am thanks to weaker-than-expected German IFO (a business climate index) data. From there, German Bunds bounced gradually higher in yield, pulling Treasuries up with them.

We reached the domestic session with Treasuries slightly higher in yield than yesterday's closing levels and MBS opened a few ticks weaker. Since then, the continually churning headline mill in Europe as well as a lack of negative economic data have allowed bond markets to weaken moderately.

Fannie 3.0s are down 4 ticks on the morning at 104-18 and 10yr yields are up 2 bps at 1.7818. FHFA released their home price data early, so all we have left on the morning calendar is the New Home Sales data at 10am, while the afternoon brings the 5yr Note Auction and last but not least, the FOMC Announcement at 2:15pm.
9:20AM  :  ADP Changing Private Payrolls Report To More Closely Match NFP
A monthly reading of U.S. private sector employment will undergo changes to put it more in line with the more closely watched government non-farm payrolls report. Automatic Data Processing (ADP.O) said on Wednesday it had made the changes to its private job market report as part of a new partnership with Moody's Analytics. While economists use the report to fine-tune their labor market forecasts, ADP has had a spotty track record of predicting the initial reading for non-farm payrolls. The changes will be in effect as of ADP'S employment report for October, which will be released Nov 1.
9:04AM  :  ECON: Manufacturing PMI 51.3 Vs. 51.5 Consensus - Markit
The Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) signalled only a modest improvement in U.S. manufacturing business conditions in October. At 51.3, the preliminary ‘flash’ PMI reading which is based on around 85% of usual monthly replies, was only marginally higher than the three-year low of 51.1 recorded in September.

PMI index readings above 50.0 signal an increase or improvement on the prior month, while readings below 50.0 indicate a decrease. Manufacturing production increased in October, taking the current sequence of growth to 37 months. Although the month-on-month expansion was only modest, it was nonetheless an improvement from the marginal rise recorded in September.
8:42AM  :  ECON: FHFA Home Prices Rise 0.7 Percent In August
U.S. house prices rose 0.7 percent on a seasonally adjusted basis from July to August, according to the Federal Housing Finance Agency’s monthly House Price Index (HPI). The previously reported 0.2 percent increase in July was revised downward to a 0.1 percent increase. For the 12 months ending in August, U.S. prices rose 4.7 percent. The U.S. index is 15.9 percent below its April 2007 peak and is roughly the same as the June 2004 index level.

For the nine census divisions, seasonally adjusted monthly price changes from July to August ranged from -0.5 percent in the East South Central division to +3.0 percent in the Pacific division while the 12-month changes ranged from 0.4 percent in the Middle Atlantic division to +11.4 percent in the Mountain division.

FHFA uses the purchase prices of houses with mortgages owned or guaranteed by Fannie Mae or Freddie Mac to calculate the monthly index. Monthly index values and appreciation rate estimates for recent periods are provided in the table and graphs on the following pages. Click here for complete historical data.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Matthew Graham  :  "RTRS - US SEPT SINGLE-FAMILY HOME SALES 389,000 UNIT ANN. RATE (CONS 385,000) VS AUG 368,000 (PREV 373,000) "
Gaius Rossini  :  "the current date is something of a covenant between the fhfa and mbs investors"
Gaius Rossini  :  "push-back from the investor community"
Andy Pada  :  "why? MSR valuation?"
Gaius Rossini  :  "i don't really see the date going away though."
Ira Selwin  :  "Like Andy said, the eligibility date is something a lot of people have complained about."
Matthew Graham  :  "part 2: http://www.mortgagenewsdaily.com/05092012_refinancing_shawn_donovan.asp"
Ira Selwin  :  "The rumor on harp 3.0 was removing the loan only being fannie/freddie, abnd allowing fha as well."
Andy Pada  :  "the easy lift is: change in eligibility date and including EA and Alt-A Fannie/Freddie loans to be included in Refi Plus and Relief Refi -Same Servicer"
Matthew Graham  :  "http://www.mortgagenewsdaily.com/05082012_shawn_donovan_refinancing.asp"
Gaius Rossini  :  "the program is about as streamlined as you can make it i thought"
Gaius Rossini  :  "what would harp 3.0 even entail?"
Andy Pada  :  "HARP keeps their book constant; doesn't increase it. Which was the underlying theme of this convention - a world of smaller GSEs"
Andy Pada  :  "not really although Fannie and Freddie really "love" HARP or have been told that they really love HARP"
tim paxton  :  "Any more news from the convention ( rumblings ) regarding HARP 3.0? Elimination or reps and warrants?"
Andy Pada  :  "At the convention, I heard someone say: the only meetings that are important are those with Fannie, Freddie, Ginnie and the FHFA."
Matthew Graham  :  "Sorta like Fed re: deflation > inflation"
Matthew Graham  :  "This next one sounds sorta familiar:"

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