MBS Live: MBS Morning Market Summary
As has been the case on many a morning where the Fed's scheduled Twist buying is the only salient market event (read more on POMO's), bond markets improved into the 10:15-11:00am operation and have pulled back just slightly since then.  Notably, 10 yr yields met resistance before breaking through a fairly epic technical floor in the mid 1.86's.  That said, the bigger volume move was the break below the 2 day lows at 1.881, a fact that's potentially hopeful, especially if 10's revisit 1.881 and use it as some sort ceiling into the afternoon.  Speaking of the afternoon, results from the 3yr Treasury Note auction will be out at 1pm, and for the first time in a long time, we'll at least glance at them in search of clues as to whether or not the intermediate term interest rate outlook was materially changed by last week's FOMC Minutes.  Other than that, MBS are still holding just over an eighth of a point of improvement on the day.  It's not much, but we'll take it.   So far, so good.
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
104-13 : +0-05
FNMA 3.5
106-08 : +0-03
FNMA 4.0
106-31 : +0-02
FNMA 4.5
107-29 : -0-01
GNMA 3.0
105-22 : +0-05
GNMA 3.5
108-05 : +0-03
GNMA 4.0
109-12 : +0-03
GNMA 4.5
109-07 : -0-01
104-02 : +0-05
105-31 : +0-03
106-18 : +0-03
107-02 : +0-01
Pricing as of 11:09 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.

9:54AM  :  Bond Markets Ratchet to Slightly Better Levels Yet Again
It's not uncommon to see several sessions of consolidation following big swings. This is true for anything that can be charted, including the blood pressure of Loan Originators. It's also true for bond markets in the wake of last week's sell-off.

Friday may have seemed like a bigger move than it really was, due to the fact that we began the session at such ugly levels. And while it's true that we rallied around half a point from trough to peak, the day-over-day gains were only a few ticks.

Such has been the case for going on 3 sessions now (Friday, Monday, and Today, assuming we were to close right here). Both MBS and Treasuries are improved by what can only be viewed as a mere twist of the ratchet, and rather than view it as a prelude to anything in particular, it speaks more to a certain measure of comfort developing ABOVE the previously pivotal pivot at 1.86+ in 10yr yields. That's not to say that 10's won't ever fall below 1.86+ again, but simply that it could serve as some sort of central staging area for further exploration in either direction.

As for this morning, 10's are down 3 bps to 1.869 and Fannie 3.0s are up 5 ticks to 104-14 in trading that's relatively calm overall, but relatively more brisk than yesterday's slow session. Once again, bond markets are showing a disregard for stock market fluctuations that borders on wanton, at least as far as the positive "first 15 minutes" of the cash stock market open were concerned, but have hooked up a bit more as stocks have fallen from their opening push higher. Disconnected when it suggests bond market weakness, and connected when it suggests strength? We'll take it!

There wasn't much to write home about during the overnight session and 10's traded well within the confines suggested by yesterday's highs and lows. Bond markets weakened through the European session, but had already met with technical support before domestic accounts came online to help continue the minor move lower in yield. MBS opened flat to yesterday's closing levels and have packed on their 5 ticks of improvement steadily and uneventfully.

There's not much on the calendar today, but Fed Twist buying concludes at 11:00am, and as always, can cause some volatility. Then there's the 3yr Auction at 1pm, which we're slightly more interested in than we've previously been, but only to see if it garners any different reception than recently unimportant examples in light of last week's FOMC Minutes.
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.

Brian McFarlane  :  "http://www.bloomberg.com/quote/doutmort:ind"
Victor Burek  :  "http://www.federalreserve.gov/econresdata/releases/mortoutstand/current.htm"
Andy Pada  :  "Does anyone have an idea what the outstanding upb on mortgages in the United States?"
Tim Mitchell  :  "Conventional w/o MI: 12/26/12 Conventional w/ MI: 12/17/12 "
MortgageMan007  :  "freddie relief refi"
Tim Mitchell  :  "what kind of loan MM"
MortgageMan007  :  "anybody know what kind of turntimes Flagstar is looking at?"
Matthew Graham  :  "that was my "thirdly" : http://www.huffingtonpost.com/2012/11/02/wall-street-obama-fire-ed-demarco_n_2065902.html"
Gaius Rossini  :  "that's probably a better indicator than any settlement deal"
Matthew Graham  :  "secondly, re "rumors abounding re: HARP 3.0," we wrote up two articles about it in May: http://www.mortgagenewsdaily.com/05082012_shawn_donovan_refinancing.asp"
Gaius Rossini  :  "jason... potentially, but wait for demarco to be booted first."
Matthew Graham  :  "Firstly: "Under the agreement, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and six other mortgage lenders will provide $5.2 billion in mortgage assistance and $3.3 billion in direct payments to wronged borrowers, according bank regulators. ""
Jason Anker  :  "MG - rumors abound that there will be HARP 3.0 in 2013. Supposed to include the ability for a bor to use HARP for a second time and for non FNMA FMLC borrower to refi. 10B could help fund that no? "
Jason Anker  :  "BofA money was for FNMA the other was fr the folks that were FC on. the 10B was due to BofA actions against FNMA so it is FNMA money"
Andy Pada  :  "money goes to borrowers...presumably."
Andy Pada  :  "foreclosure settlement does not go to Fannie/Freddie/FHFA"
Jason Anker  :  "MG - recent bank settlements = $$ for HARP 3.0? "

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