As noted in today's MBS Huddle, an absence of any selling pressure in bond markets was a positive result in itself.  Selling pressure would have been fairly easy to justify given the slightly stronger CPI data as well as moderately stronger Retail Sales.  Bonds not only held their ground but did so at the lowest yields of the week.  

Things began to look a little shaky heading into the afternoon, but as soon as European markets closed, bond buyers found themselves in control again.  Treasuries began drifting back toward lower yields (more so in longer-dated bonds) and MBS approached the morning highs, up more than an eighth of a point.

The yield curve (which typically refers to the spread between 2 and 10yr Treasury yields) has certainly been a consideration for traders.  The fact that it broke to another "lowest in a decade" level this morning may well have been the source of the weakness that followed.  We talked about the potential for this sort of corrective weakness as the curve continues heading lower/tighter.  This time around, however, the curve came back for a second helping in the afternoon, and didn't look nearly as eager to bounce as it did when we blamed it for last week's sell-off in bonds.

2017-11-15 close

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
102-25 : +0-06
10 YR
2.3275 : -0.0535
Pricing as of 11/15/17 4:38PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:58PM  :  Back Near Best Levels Thanks to Europe and Yield Curve
10:35AM  :  ALERT ISSUED: Negative Reprices Becoming a Consideration For a Few Lenders
8:37AM  :  Bonds Not Panicking After Core CPI Ticks Up to 1.8%

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Christopher Stevens  :  "Much of the weakness in the MMIF is attributable to the HECM program. The capital ratio of the HECM program is negative 19.8% (a decrease from negative 11.8% a year ago), with an economic net worth of negative $14.5 billion"
Timothy Baron  :  "Perhaps, just perhaps, if FHA was less expensive it wouldn't be primarily the last resort of less qualified borrowers and might have better performance."
Christopher Stevens  :  "This also came out today..."The speculation that the Department of Housing and Urban Development would announce a cut to Federal Housing Administration mortgage insurance premiums appears to have been just that – speculation. HUD announced Wednesday that premiums will not be cut, due in part to the weaker-than-expected performance of the FHA’s flagship insurance fund.""
Chris Hooker  :  "Just announced on CNBC as well, departure by months end"
Ted Rood  :  "Can you say "buy back"? I knew you could!"

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Nov 15
8:30 CPI mm, sa (%)* Oct +0.1 0.1 0.5
8:30 Retail Sales (%)* Oct +0.2 0.0 1.6
8:30 Core CPI Year/Year (%)* Oct +1.8 1.7 1.7
10:00 Business Inventories (% ) Sep 0.0 0.0 0.7