As expected, not much is going on today as the focus remains on tomorrow's FOMC events.  Overnight volumes and participation levels were light for the 2nd straight day, though things have picked up just a bit from yesterday (which was the lightest session of the year).  Still, the general trend was positive.  Treasuries have been outperforming European bonds so far this week, which seems like a significant commentary on the underlying predisposition to remain in this sub 2.15% range in 10yr yields.

It's not that rates wouldn't be willing to move back up, but that probably depends on tomorrow's FOMC Announcement, press conference, and forecasts.  With 10's at 2.05% today, they're right in the middle of a long term inflection zone--certainly one of the top 3 inflection points of the current low rate era (the others being 2.34 and 1.84, and immediate vicinities).

What does all this mean?  Simply that bond markets have been honing in on levels that have allowed them to be nimble and adaptive in the past.  It's akin to 50 yard line seat. 

Their desire to be here was made all the more obvious by the lack of a reaction to this morning's data.  I saw a few headlines that actually credited the weaker Housing Starts number for today's bond rally.  That's odd considering rates generally moved higher right after the data.  Volume suggests markets didn't much care where Housing Starts came out this morning.


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
101-13 : +0-03
FNMA 3.5
104-13 : +0-02
FNMA 4.0
106-18 : +0-01
Treasuries
2 YR
0.6650 : +0.0120
10 YR
2.0580 : -0.0150
30 YR
2.6150 : -0.0310
Pricing as of 3/17/15 1:00PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:32AM  :  Paradoxically Giving Up Some Gains After Weaker Overnight Data

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "Yes, FED will raise rates to slow down the weather"
Frank Hanna  :  "Vic its always the weather. "
Matthew Graham  :  "midwest -37, South -2.5, West -18.2, but all of those had gains in Permits, Northeast permits were down 17.4"
Victor Burek  :  "what about the other parts of country?"
Matthew Graham  :  "Northeast - 56.5 pct"
Victor Burek  :  "must be the weather"
Matthew Graham  :  "RTRS- US FEB SINGLE-FAMILY STARTS -14.9 PCT TO 0.593 MLN UNIT RATE; SINGLE-FAMILY PERMITS -6.2 PCT TO 0.620 MLN UNIT RATE"
Matthew Graham  :  "RTRS - US FEB HOUSING PERMITS 1.092 MLN UNIT RATE (CONSENSUS 1.065 MLN) VS JAN 1.060 MLN UNIT RATE (PREV 1.060 MLN)"
Matthew Graham  :  "RTRS- US FEB HOUSING PERMITS +3.0 PCT VS JAN UNCHANGED (PREV +0.2 PCT)"
Matthew Graham  :  "RTRS- US FEB HOUSING STARTS 0.897 MLN UNIT RATE (CONSENSUS 1.049 MLN) VS JAN 1.081 MLN UNIT RATE (PREV 1.065 MLN)"
Matthew Graham  :  "RTRS- US FEB HOUSING STARTS -17.0 PCT VS JAN UNCHANGED (PREV -2.0 PCT)"