MBS and Treasuries are at their weakest levels in 3 weeks ahead of this afternoon's FOMC Announcement.  That's really all there is to it.  We haven't had any meaningful market movers, and in fact, the only motivation has come from traders watching other traders.  In that regard, "defensive" would be the best way to characterize the bigger trades we've seen. 

There was an obvious glut of large trade activity from 9:11 to 9:17am in 5 and 10yr Treasuries.  This took bonds to their weakest levels, but the volatility is completely insignificant compared to that seen 2 weeks ago, or that which might be on the horizon. 

While we're technically into our weakest recent levels, it's nothing more than an incidental drift.  For instance, Fannie 3.5s are down only 1/32nd on the day.  There is no conviction here, just an unlucky break for morning rate sheets.

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
100-03 : -0-02
FNMA 3.5
103-13 : -0-01
FNMA 4.0
106-04 : -0-01
2 YR
0.4380 : +0.0400
10 YR
2.3190 : +0.0190
30 YR
3.0840 : +0.0110
Pricing as of 10/29/14 12:11PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:24AM  :  ALERT ISSUED: Negative Reprice Risk on the Horizon
9:37AM  :  US Bond Markets Walking Their Own Path (of weakness) Ahead of Fed

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ira Selwin  :  "http://mndne.ws/1u7giZV"
Jason York  :  "isn't there a guidline that if you have 5 financed properties, you can't do a cashout on an investment?"
Matthew Graham  :  "I don't know any credible human who's argued that QE is sticking around. Furthermore, we have Bullard saying he thinks QE could be paused, and he's the opposite of credible these days."
Chris Hooker  :  "Good, my paranoid mind wouldn't stop thinking about the potential outcomes with the recent drop..."
Matt Hodges  :  "i don't think QE not ending is remotely possible. "
Chris Hooker  :  "Anyone else concerned that the recent drop in TSY's could be attributed to assumptive wagers that the Fed won't end QE and the actual ending could cause an abrupt rise?"
Matthew Graham  :  "Last week notwithstanding, today's report would have been barn-burner "
Matthew Graham  :  "vs the previous week, of course"
Andy Pada, Jr.  :  "mortgage apps got smacked."
Matthew Graham  :  "Yeah, today is about market participants. Fed will just try to lay up for par."
Gus Floropoulos  :  "i dont think thats gonna happen Oli"
Oliver Orlicki  :  "if they dont end qe3, where do you see us going?"