Although we have just under an hour of trading left in the day, if MBS were to end right at current levels, January would be the strongest month of gains in over 2 years, beating out September 2013 by just half a tick. Prices started the day in stronger territory today--a factor of overnight positivity in both Asia and Europe--and haven't moved outside an eighth of a point range.
The morning data was uneventful, coming in close to consensus on all accounts or otherwise having embedded counterpoints. In other words, where the headline Chicago PMI was stronger than expected, the internal employment component was weaker. Volumes stayed strong with good 'month-end' participation seen keeping Treasury yields contained, and providing an incidental boost for MBS.
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