Bond markets have been trading calmly and slightly stronger.  That said, the strength is more in line with "follow through" from Friday morning's more concerted rally. 

For instance, in a market vacuum, if we could observe just one source of motivation at a time, we'd see that movement in either direction is stronger at first and then levels off as it asymptotically approaches it's ultimate price.  We'd also see that the points at which prices level-off, tend to have served a similar purpose in the past.  Such is the case with 104-00 in Fannie 4.0s today.

The chart below shows how it has come into play in the past and how it's setting the stage for prices leveling-off today.  This doesn't mean we're capped out here necessarily, but there is a good amount of 'gravity' heading into tomorrow's Retail Sales data.

Fannie 4.0 MBS

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
96-04 : +0-07
FNMA 3.5
100-15 : +0-07
FNMA 4.0
103-32 : +0-07
2 YR
0.3620 : -0.0160
10 YR
2.8395 : -0.0205
30 YR
3.7858 : -0.0102
Pricing as of 1/13/14 12:14PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:38AM  :  Slow Start; Slightly Positive; No Data

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Christopher Stevens  :  "Amazing how one NFP report has all the talking heads out there talking about maybe there was need to start taper. Perhaps they should read MG's Day Ahead today. "We're most likely to find that one bad jobs report means very little in the grand scheme of things and FOMC members have said as much. Too, recall that the utterly deceptive 95k NFP private payrolls print that tricked markets into thinking Bernanke's March 20th comments were premature, ultimately was revised to 154k! ""
Victor Burek  :  "speaking about jobs, this was very interesting read this weekend,"
Craig Stanislaw  :  "Anyone have a good title company in Murrieta CA?"
Nathan Miller  :  "First American is all over So Cal Craig they are great."
Nathan Miller  :  "np...Temecula is the closest one, next big city south of Murrieta: (951) 296-2948"
Ira Selwin  :  "Is anyone here NOT counting Conventional Up-Front MI towards the 3% pts/fees ?"
Ira Selwin  :  "Interesting. Many are still counting it as the CFPB definitions are a bit vague."
Kent Mikkola  :  "Ira, most of our lenders won't count the first 1.75% of up front MI... so only really an issue when going 95% LTV"
Barbara Healy  :  "I would be careful. Check the investor guidelines for how they are counting MI. Especially if you count it one way puts you over & the other way doesn't. And my understanding was that Wells wasn't allowing UGI's borrower-paid single premium refundable MI..."