Until this morning, recent momentum in bond markets was clearly and cleanly pointing to a correction within the recent range, where rates would move higher after spending a good amount of time prodding 2014 lows.  In the course of that prodding, while MBS managed to hit new highs, broader "bond markets" (as represented by 10yr yields) merely revisited February's lows.  This was a fairly bearish eventuality, and one that coincided with most technical indicators shifting toward higher rates. 

That "writing on the wall"--as clear as it may have been--was met with the fiercely brandished eraser of a very weak Retail Sales report this morning.  In and of itself, the data isn't able to completely erase the writing on the wall.  So it simply makes it harder to read. 

In other words, whereas the move higher within the range was looking quite likely and uneventful, today we're forced to consider whether or not it's on hold, and for how long, or if it might be reversing.  For all intents and purposes it sets us back a few days, when it wasn't yet crystal clear that momentum was leading toward higher rates.  Keep in mind though, it's very easy for markets to trade as-expected in the face of a big deviation in economic data.  It's far more telling to see where things go in the absence of significant data.  Tomorrow will do a better job in that regard.

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
97-25 : +0-12
FNMA 3.5
101-31 : +0-12
FNMA 4.0
105-02 : +0-11
2 YR
0.3830 : -0.0160
10 YR
2.6107 : -0.0453
30 YR
3.4421 : -0.0499
Pricing as of 5/13/14 3:57PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:55PM  :  Well Off Highs Now, Mostly Holding Gains
12:50PM  :  Inching Toward New Highs; Positive Reprice Potential
8:55AM  :  Bond Markets Stronger After Retail Sales, German Central Bank News

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Chip Harris  :  "So I have a HUD specialist at Interbank that is telling me that it's considered cash out if a no-escrow refi has the 2nd half taxes rolled into the loan and she is requiring that 2nd half be paid now even though they are due 6/15. Ever heard of that?"
Ted Rood  :  "can't borrow the money for taxes and stay rate/term if you're no escrowing."
Andrew Haynes  :  "good for you wells for taking it to the fha!"
Andy Pada, Jr.  :  "fha reduction in premiums if borrowers go to counseling"
Alan Craft  :  "Unfortunately that reduction is far less than the recent increases AP"
Jason Anker  :  "yea savings looks to be very small, 27 per month on avg FHA loan. no idea what avg fha loan is however"