On a scale of 1-10, with 10 being the best case scenario for bond markets, today was 6.  It probably stood very little chance to be much more than a 7 or an 8, but a very real chance to be a 2-3.

In other words, we dodged a bullet, but remain under fire.  Retail Sales was quite a bit weaker than expected--notably affecting many firms' running estimates of GDP--and Jobless Claims offered no counterpoint, yet bond markets only managed modest improvements.  Rates, for instance, didn't even make it back to Tuesday's levels.  As far as consolation prizes go, it's better than a sharp stick in the eye, but in and of itself, isn't something we're likely to cherish for years to come.

One counterpoint that makes things a bit less gloomy is the fact that the rally commenced despite another big day of gains in equities.  While the stock lever has disconnected quite a bit, that could still be worth something.  Additionally, rates held their ground ahead of the 30yr bond auction where 3.70 (30yr Treasury yield) was prodded several times.

While the auctions were solid, who knows how solid they would have been without all the weakness that's been built in this week?  If by yesterday we were growing to accept the reversal of January's trend toward lower rates, nothing about today changes that.  At stake was the formation of the next trend (i.e. would we now reverse quickly higher in rates, gradually weaker, or muddle sideways), and today's trading simply delays that process.  With serious weather problems mounting in New York, tomorrow might not be any more illuminating.

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
96-20 : +0-17
FNMA 3.5
100-29 : +0-13
FNMA 4.0
104-12 : +0-09
2 YR
0.3150 : -0.0320
10 YR
2.7338 : -0.0292
30 YR
3.6820 : -0.0400
Pricing as of 2/13/14 4:20PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:26PM  :  Bond Markets Stronger After 30yr Auction
8:57AM  :  Bond Markets Stronger Overnight, Stronger Still Following Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Michael Gillani  :  "I guess what my soapbox is aimed at proclaiming is that in my opinion, I don't believe the consumer is really in any better of a position today when it comes to understanding and being led properly and honestly in their transaction then they were 5 years ago before the crash. All of these policies and regulations have only driven up cost, made the process more confusing and made it easier for the liars to lie and cheaters to cheat and profit from it. "
Michael Gillani  :  "Due to the NMLS and licensing, there may be a few less liars and cheaters but that's about it."
Michael Ullmann  :  "well put"
Brent Borcherding  :  ""We're the gov't and we're here to help you.""
Michael Gillani  :  "The only thing the changes have really done outside of driving up costs for the consumers is too make it harder for the good guys to earn a living and stay in business."
Dez Loessberg  :  "Here's a good one: An agent I refer my buyers to who closed 2 of them last for about $14K in commission last month just sent me a "referral." When I called, the customer told me I was "much more helpful than the first person she was referred to" by the same agent. We are fools if we think we honestly get "exclusive" referrals..."
johnmurphy  :  "never underestimate te power and scope of the CFPB. thats what I tell realtors. if you're in the loop of homeownership, you are not bulletproof. they get my drift. look at what'shappening on the title ins side"
Matthew Graham  :  "RTRS- U.S. 30-year bond BID-TO-COVER RATIO 2.27, NON-COMP BIDS $16.06 MLN"

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Feb 14
8:30 Import prices mm (%)* Jan -0.1 0.0
8:30 Export prices mm (%)* Jan 0.0 0.4
9:15 Industrial output mm (%) Jan 0.3 0.3
9:15 Capacity utilization mm (%) Jan 79.3 79.2
9:55 U.Mich sentiment * Feb 80.6 81.2