To be clear, bond markets are still in strongly positive territory this morning, though they're off their best levels seen just after 7am.

Volatility in global financial markets is elevated and some unique things are happening.  This has resulted in a fair amount of dogpiling on to seemingly easy explanations.  The price of oil and the status of Russia's currency--the Ruble--seem to be today's hot topics. 

In actuality, the oil story is quite old at this point, and it's doing more to follow other markets than to move them.  The Ruble story is up for debate today.  It clearly matters, but it's maybe HALF as important as big media has made it out to be.  Yesterday, sure.  Today, not so much.

Today's big story is Europe (though admittedly, Eurodollar trading is compounded by craziness in the Ruble).  In a nutshell, the mouthpiece for the German opposition to Mario Draghi's sovereign bond-buying goals threw more cold water on said goals.  Jens Weidmann, president of Germany's central bank said that inflation could be negative for several months and sovereign QE would still be a bad idea.

The result was predictable if you've been following along with my avant garde thesis about sovereign QE being bad for core bond markets and good for the likes of Italy, Spain, etc.  Italian yields sold off sharply (moved higher) and German/US yields rallied sharply.  That rally was clearly led by German debt and Eurodollars.  It was clearly compounded by weakness in the Ruble.  Finally, Treasuries clearly followed all of the above.  

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
101-12 : +0-10
FNMA 3.5
104-11 : +0-08
FNMA 4.0
106-20 : +0-05
2 YR
0.5560 : -0.0240
10 YR
2.0747 : -0.0403
30 YR
2.7080 : -0.0340
Pricing as of 12/16/14 12:32PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
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

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS- US NOV HOUSING PERMITS 1,035,000 UNIT RATE (CONSENSUS 1,060,000) VS OCT 1,092,000 UNIT RATE (PREV 1,092,000 UNIT RATE)"
Matthew Graham  :  "RTRS- US NOV HOUSING STARTS 1,028,000 UNIT RATE (CONSENSUS 1,040,000) VS OCT REVISED 1,045,000 UNIT RATE (PREV 1,009,000 UNIT RATE)"
Sung Kim  :  "probably taking out some stop orders, maybe we will have a flash crash like october"
Christopher Stevens  :  "Short covering in 10yr today?"
Christopher Stevens  :  "Waking up to 2.06 is nice"