As Fannie 3.5 MBS pushed over 104 and 10yr yields moved down toward 2%, it became increasingly clear that the bond market rally required an ever-larger supply of motivation to continue rallying.  When we actually lost ground yesterday despite the some fairly negative news around the world, it looked like we'd reached the near-term limit and were consequently set to trade cautiously heading into tomorrow Fed Announcement.

But in the overnight session, global financial markets dropped off another huge meal for US bond markets.  For the second day in a row, the Russian Ruble fell in value more than any other session in 16 years--the last time Russia defaulted.  If anyone still cares about oil prices, they too trended lower.  Stocks were much weaker out of the gate and comments from Germany's top central banker cast doubts on the viability of sovereign QE in Europe (no QE is currently a good thing for German and US interest rates).

All of the above resulted in 10yr yields hitting 2% overnight.  Everything since then has simply been a consolidative correction.  There was a slight risk of a bigger pull-back just before noon, but bonds bounced back again immediately following the close of European stock markets, and never came close to dipping into negative territory.  Fannie 3.5s are heading out a quarter point higher.  3.0s are 3/8ths of a point higher.  Rate sheets are the best they've been since May 22nd, 2013--the first day of the Taper Tantrum. 


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
101-14 : +0-12
FNMA 3.5
104-12 : +0-09
FNMA 4.0
106-21 : +0-06
Treasuries
2 YR
0.5560 : -0.0240
10 YR
2.0590 : -0.0560
30 YR
2.6880 : -0.0540
Pricing as of 12/16/14 4:14PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:47PM  :  MBS Back up to Rate Sheet Print Time Levels (or Better)
11:28AM  :  ALERT ISSUED: Treasuries up to High Yields; MBS Near Lows; Reprice Risk Creeping in
9:11AM  :  Like Low Rates? Thank a Stubborn German Central Banker and Maybe the Ruble

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "everything for dec locked up, floating all January loans"
Timothy Baron  :  "Locking."
Nathan Miller  :  "locked up"
Jeff Anderson  :  "I did. Pretty happy with it."
Jason Anker  :  "locked a few"
Andy Pada, Jr.  :  "who is locking in?"
Victor Burek  :  "i wouldn't be locking anything longer than 15 days"
Sung Kim  :  "then we rally further, thank you all for locking"
Matthew Graham  :  "Looks like a few rate sheets are right in line with 5/22/2013. Good little nugget of info there for those that would use such a thing in a database email. (because 5/22 is the first day of the taper tantrum, depending on who you ask)."