Both MBS and Treasuries were weaker at the start of today's domestic session.  While that was slightly more pronounced for Treasuries, so was yesterday afternoon's rally.  As such, when viewed against a slightly broader backdrop, MBS are by no means running away from Treasuries, but were able to edge into positive territory by the end of the day while Treasuries stayed in the red.

Adding to the Treasury-specific challenges today was the once-in-a-blue-moon occurrence of an auction doubleheader, with both 5 and 7yr Notes being sold at 11:30am and 1pm.  The implied pressure on Treasuries from that concentrated supply--and subsequent relief at the supply being doled out--was evident as yields noticeably eased after 1pm.  The fact that the 7yr auction was strong not only helped that easing process, but also speaks to the reality of the current bond market strength in the face of a healthy bounce in stocks.  Either that, or month-end buying needs are keeping Treasuries propped up today and tomorrow with a bigger shift waiting in February.

That we're even able to entertain multiple eventualities (where one of them includes "strong bond markets") is a welcome change in 2014, but  be aware that we're only now matching October's correction in terms deviation from broader uptrend in rates.  That makes next week's NFP week and important milestone for this correction.

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
96-31 : +0-03
FNMA 3.5
101-08 : +0-02
FNMA 4.0
104-20 : +0-01
2 YR
0.3514 : +0.0004
10 YR
2.6931 : +0.0181
30 YR
3.6341 : +0.0131
Pricing as of 1/30/14 4:12PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:09PM  :  MBS Hit Best Levels After 7yr Note Auction
11:52AM  :  Treasuries Test Weakest Levels Following 5yr Auction
9:02AM  :  Bond Markets Slightly Weaker After First Round of Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "7yr Auction coming up at 1pm. 6 out of the last 6 have come in at or above the 1pm 'when-issued' yield (basically the 'expected yield'). Bid to cover has ranged from 2.36 to 2.66 over that time for an average of 2.49. If this is confusing, and you want to know more, this page can be useful."
Matthew Graham  :  "RTRS- U.S. 7-YEAR NOTES BID-TO-COVER RATIO 2.65, NON-COMP BIDS $26.45 MLN "
Matthew Graham  :  "A-"
Kent Taylor  :  "and a green 'pop'"
Brent Borcherding  :  "Anyone aware of a lender that will allow for a Non-Occupant co-borrower on a Jumbo? I have a client who wants to buy new residence before selling current, doesn't want to be in a rush searching for $1M home, but can't qualify alone when carrying both mortgages. Unlikely, but thought I'd ask."
Joel Marks  :  "Brent, Union Bank was the last non-retail outlet I knew that would do this, and they just changed on 1/9 (I snuck one in right before that). No go from Wells, USB and Chase. On the retail side, First Republic may be on option, and they are in Oregon. Be aware of their prepays."
Caroline Roy  :  " 100% certain that USB will do blended on their conforming program with Non-occ coborrower. but haven't read the jumbo guides. its a great program in a college town..."

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Jan 31
8:30 Personal income mm (%) Dec 0.2 0.2
8:30 Consumption, adjusted mm (%)* Dec 0.2 0.5
9:45 Chicago PMI * Jan 59.0 59.1
9:55 U.Mich sentiment * Jan 81.0 80.4