Most of today's movement was seen in between data releases as opposed to immediately following.  In other words, Housing Starts came out this morning and markets didn't move.  It wasn't until after Industrial Production at 9:15 (though not because of it) that bond markets weakened by any noticeable amount.  Even then, the trades that made the difference came across at 9:19am and that's not the kind of thing we typically see if movement is data-related.  All we got in the first 10 minutes after Consumer Sentiment was volatility, then trading levels simply drifted into stronger territory by the close, grinding progressively lower in volume all the while.

While trading levels are the best all week, the outright gains were small enough that no important technical levels were seriously tested.  If 10yr yields, for instance, were moving quickly below 2.82, that would be meaningful, but as it stands, we're simply grinding into the week's best levels.  There's nothing wrong with that at all, and we'd hesitate to draw too firm a conclusion based on Friday afternoon in light volumes anyway. 

Next week is precious little solace as far as activity is concerned.  It's the token mid-winter vacation week where the economic calendar conspires with a 3-day weekend.  The following week, however, brings a rather important FOMC Announcement where we get to see if the latest Payrolls numbers will have swayed their stance.  Surveys say no, but some of that sentiment is floating around.

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
96-08 : +0-07
FNMA 3.5
100-20 : +0-07
FNMA 4.0
104-03 : +0-05
2 YR
0.3753 : -0.0117
10 YR
2.8194 : -0.0256
30 YR
3.7489 : -0.0241
Pricing as of 1/17/14 5:10PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:02AM  :  Shaking Off Weakness; Back in Positive Territory Now
10:08AM  :  ALERT ISSUED: Weaker Sentiment Data Failing to Stem Losses; Bond Markets Paradoxically Weaker
9:51AM  :  Bond Markets Back to Unchanged after Industrial Production (Not Necessarily Because of it)
9:15AM  :  For 3rd Straight Day, Bonds Flat Overnight, Slightly Stronger After Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Justin Harward  :  "Did you guys see the "QM and ATR fact vs fiction" letter? It basically says that it's a myth that the new rules will restrict credit for borrowers because QM is "voluntary" and lenders can choose not to write only QM. If you ask me, QM is about as "voluntary" as paying the mob for protection money... think "Nice business.... it'd be a shame if somethin' were to happen to it""
DIRK POSTUPACK  :  "That's funny Justin.....This morning on Fox there was a guy that was talking about the new rules that came into effect. He said that the new rules won't allow SISA or NINA loans rule???"
Jason Anker  :  "We’re dragging along the bottom of a few technical levels for TSY and MBS so my advice to my clients currently is to lock"
Matthew Graham  :  "there's a distinct possibility that your quoted scenario could improve next week. There's also a possibility you'll never see today's rate again. The trend favors the latter in general for the past 8 months, but we're currently in the midst of one of the most stable periods of correction to that broader trend. No one knows how long that will last. Could be over today, or it could take on a whole new life later this month and early Feb. I think though, until that's proven to be the case, that even the fundamental environment generally suggests we'll have a harder time moving lower in rate vs higher."