Today's activity in bond markets leaves rates perfectly flat, on average, during the month of November.  In other words, on a chart of 10yr yields, if you drew a straight line back to the first minute of November with an equal number of minutes above and below the line, it would be perfectly flat. 

While that's a positive development in the bigger picture (considering the 2nd half of October had clearly been a negative trend), it's meant a fairly serious pull-back from overnight strength.  10yr yields were as low as 2.319 by the first hour of domestic trading and are now back up to 2.353.  Fannie 3.5 MBS were trading around 103-09 at the open and are now down to 103-03.  While both are still technically in positive territory vs Monday's latest levels, the mid-morning trend is decidedly negative.

We can only hope that we're seeing overly-cautious preparations for the 1pm Treasury auction (10yr Notes), though the negativity increased when European markets closed.  That suggests domestic bond markets had been benefiting from European bond market strength.  Without overcomplicating things, we can simply say that there was less risk tolerance (good for bonds, bad for stocks) when Europe was still in session.  It increased when the US session began, and is increasing further now that Europe is closed (good for stocks, bad for bonds).


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
99-23 : +0-03
FNMA 3.5
103-05 : +0-03
FNMA 4.0
106-00 : +0-04
Treasuries
2 YR
0.5350 : -0.0040
10 YR
2.3480 : -0.0120
30 YR
3.0770 : -0.0150
Pricing as of 11/12/14 12:23PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:26AM  :  ALERT ISSUED: Some Lenders Near Negative Reprice Territory
9:39AM  :  Bond Markets Pulling Back After Overnight Rally; MBS Prices Affected by Roll

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "the occupying borrower must have 5% of their own funds in to the transaction and use Radian for MI"
Matt Hodges  :  "LP question - need Non-OCC CB. Okay with Freddie at 5% down?"
Clayton Sandy  :  "I've had issues with LP at 95% at 41-42%. Reserves can be the key with that. "
joon choi  :  "LP cap at 50.49, lp round down, I have 95 arm approved over 45, but it is not easy"
dustin mcalister  :  "is the LP DTI cap 45% on 95% ltv arms? "
Matthew Graham  :  "RTRS- U.S. SEPT WHOLESALE INVENTORIES +0.3 PCT (CONSENSUS +0.2 PCT) VS AUG +0.6 PCT (PREV +0.7 PCT)"
Andrew Horowitz  :  "might also be baked in what are the "forecasters" saying"
Matthew Graham  :  "maybe? It's not a perfect connection. Last time Bund yields were under .8, US 10's were doing much better. That said, if Bunds are moving strongly lower, we probably won't be going higher."
Sung Kim  :  "If German GDp prints neg tomorrow will that be good?"