It's been a fairly uneventful, yet positive morning for bond markets.  After coming into the domestic session in just slightly weaker territory, bonds got a boost from weaker-than-expected internals in the Durable Goods report.  That means that while the headline was stronger than expected, the constituent pieces of the report painted a different picture.  In other words, the headline was skewed by aircraft and defense spending, and when that's factored out, manufacturing activity was much weaker than expected.

The cues from the economic data have been augmented by several bigger instances of buying in the Treasury Futures complex.  5 and 10yr futures particularly, have both had more than one "block trade" reported (essentially "big trades" that can act as motivation for other market participants). All this really means is that some larger accounts are buying 5's and 10's for reasons unknown.

10yr yields were close to 2.76 at 8am and moved briskly lower to 2.72 by 10:50am.  They've bounced there once and are now waiting for the next move.  MBS experienced the same sort of move with Fannie 4.0s rising from 103-25 to 104-02.  The next potentially significant event of the day is the 5yr Treasury auction at 1pm.

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
96-17 : +0-09
FNMA 3.5
100-20 : +0-07
FNMA 4.0
104-01 : +0-07
2 YR
0.4535 : +0.0245
10 YR
2.7262 : -0.0088
30 YR
3.5804 : +0.0014
Pricing as of 3/26/14 12:04PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:49AM  :  Bond Markets Back into Positive Territory After Durable Goods Paradox

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS- US FEB DURABLES ORDERS +2.2 PCT (CONSENSUS +1.0 PCT) VS JAN -1.3 PCT (PREV -1.0 PCT)"
Victor Burek  :  "so headline good, but the details not so good?"
Matthew Graham  :  "yeah Vic. In fact, details pretty bad"
Hugh W. Page  :  "Funny headlines on CNBC about Durables Goods. "US Durables Roar in February""
Nathan Miller  :  "no love on rate sheets this a.m."
Christopher Stevens  :  "NM- when rate sheets were published the 10YR and MBS were on par with yesterday's close. MBS now 4-5 tics better so maybe a little more improvement and we may see a few reprices."
Nathan Miller  :  "hear that CS... some lenders just posting rates in the last 20 min, seeing par to yest or even .125 worse"