Bond markets have given up most of yesterday's strength so far this morning, though that's more true for Treasuries than MBS.  The morning has been surprisingly uneventful, and in fact, goes a long way toward disbarring the Retail Sales data as a report that's worthy of making a case for the economy.  It just hasn't produced much movement in the past several instances.

In terms of 10yr yields, Retail Sales was good for 1.5bps of movement, though it quickly washed out to 0.0bps in the first 15 minutes following the report. 

Technical selling (that which is motivated by outright trading levels rather than underlying fundamentals) took over  after 10's failed to break 2.84 after repeated attempts.  Supply/demand imbalances added to the weakness after the Fed's daily Treasury buying operation (revealing more than the average amount of interested sellers, as the Fed publishes the amount it buys and the amount offered by sellers).

Last, but not least, the stock lever remains a consideration.  This was discussed in the Day Ahead, and has come into play again today.  As you can see in the chart below, it's by no means the 1:1 ratio seen at times in the past, but the 9:30am-mid-afternoon time frame has seen clear cross-contamination from weaker stocks yesterday and stronger so far today.

Treasury / Equity Combo

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
95-30 : -0-10
FNMA 3.5
100-09 : -0-10
FNMA 4.0
103-26 : -0-08
2 YR
0.3702 : +0.0122
10 YR
2.8635 : +0.0385
30 YR
3.7982 : +0.0322
Pricing as of 1/14/14 12:20PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:25AM  :  ALERT ISSUED: MBS hit Lows; Negative Reprice Risk
9:10AM  :  Retail Sales Leaves bond Markets at Weaker Levels

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Christopher Stevens  :  "JPM earnings out. This is what the mortgage end looked like: For the mortgage market, the company’s year-end fourth-quarter earnings show mortgage origination activity plummeting 54% year-over-year, with mortgage originations reaching $23.3 billion in the most recent earnings period – a number that is down 42% from just the third quarter of 2013. Digging deeper, purchase origination activity managed to grow, reaching $13 billion in 4Q, up 65% from last year and 35% from the third quarter. "
John Tassios  :  "The purch biz will never make up all of the lost refi volume, especially with the new QM rules in effect"
Christopher Stevens  :  "agree which is way the cost of mortgages will go up"
Frank Hanna  :  "Green after retail sales?"
John Tassios  :  "Bonds made a good run past 2 days, today may be more of a consolidation day to see where they go from here, I think the 2.82 10 TSY is resistance level "
Matthew Graham  :  "RTRS- US DEC RETAIL SALES +0.2 PCT (CONSENSUS +0.1 PCT) VS NOV +0.4 PCT (PREV +0.7 PCT) "
Matthew Graham  :  "RTRS- U.S. DEC EXPORT PRICES +0.4 PCT (CONSENSUS +0.1 PCT) VS NOV +0.1 PCT (PREV +0.1 PCT) "
michael kirsch  :  "Mortgage News Daily - 1/13/14 3:32PM Mortgage Rates Back to Late November Levels is that the daily update or the weekly update"
Matt Hodges  :  "Michael Kirsch and others - look at the bottom of the screen where it says "My Alerts" You can get a lot of data texted/emailed etc to you, even if you aren't logged in at that time. There's a lot on this site if you snoop around"
Constantine Floropoulos  :  "the Alerts are extremely helpful in staying up to par with whats important"
Ted Rood  :  "Plus you can email out anything from MND, cobranded with your info, to referral partners and customers. It's a huge way of educating them and establishing your value."
Chip Harris  :  "anyone lnow minimum number of years of service to be eligible for a VA loan?"
Jason York  :  "90 days during war time, or 180 in peace, or 6 years for reserves"