Treasuries and--by default--MBS are still more than willing to take cues from European bond markets.  This is especially true in the overnight session where Treasuries frequently and faithfully follow German Bund yields.  MBS then benefits (or suffers) at the open accordingly. 

But as the US session ramps up, that's when we've been seeing more autonomy in US markets.  While it's no surprise to see US trading setting the tone during US Trading hours, it raises a question as to how much European market movement will be required to get US markets to follow some of the bigger technical breakouts.

Today was a good case study for that as German Bunds broke and remained at new all-time lows.  That break was likely to result in US 10yr yields breaking below 2.47, and indeed it did.  But then 10's trickled back above 2.47 by the end of the day.  US markets can only defy the global momentum for so long, but their breaking point (for a move below 2.40%) remains unclear.  European markets may have a clearer picture of their next sustained move after tomorrow morning's European Central Bank Announcement at 7:45am.

Fannie 3.5s ended the day 3 ticks higher after being as much as 9 ticks higher at the open.

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
98-18 : +0-04
FNMA 3.5
102-12 : +0-03
FNMA 4.0
105-17 : +0-02
2 YR
0.4600 : -0.0080
10 YR
2.4690 : -0.0140
30 YR
3.2680 : -0.0100
Pricing as of 8/6/14 5:06PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:15PM  :  ALERT ISSUED: Bond Markets Still Languishing Near Lows; Moderate Reprice Risk Remains
11:03AM  :  ALERT ISSUED: Negative Reprice Risk Increasing Slightly as MBS Push Lows
9:54AM  :  Bond Markets Pull Back as Stocks Rally Sharply at the Open
9:25AM  :  European Bonds Surge, Pulling US Yields Lower Overnight; Holding Ground Now

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Marty Komertz  :  "new MIP makes it tough on new home owners trying to get into the market."
Jeff Anderson  :  "I just looked at my numbers and yep, my FHA is way down from last year. I'd still think it's 10-20%."
Matt Hodges  :  "i've closed one FHA - streamer with reduced Mi in the last 12 months"
Jeff Anderson  :  "That should help the housing recovery. What's FHA these days for purchases? 20% of the market or so, down from 40-50% a few years ago?"
Ted Rood  :  "Have to complete a worksheet on risk/comp factors. Too high payment shock/DTI, too low reserves/time on job, etc can kill deal even if DU approves. Good thing FHA is loan of last resort for me, anyway."
Jeff Anderson  :  "What sort of limitations, TR?"
Ted Rood  :  "anyone else see new investor/lender limitations on sub 680 FHA purchases?"
Bryce Schetselaar  :  "Usually you can get to 50.49% on LP, but good reserves are likely a must"
Michael Mitchell  :  "High Balance loan- 49.9% DTI- Limited reserves. Are direct lenders closing these? "
Dave Pressel  :  "most Jumbo investors are 0x30 last 24......just had a purchase we had to restructure as a hibalance with a HELOC instead"
joon choi  :  "1x60 in last 12month is no go"
Brent Borcherding  :  "2 x 30 in 12 months is a no go"
Victor Burek  :  "everyone of my correspondent lines have 0 x 30 overlay"
Victor Burek  :  "what lenders you guys using that are allowing late pays on mortgage in prior year?"