10yr yields spent some time in the 1.7's today and Fannie 3.0s traded over 103.  Those are two things that seemed outside the realm of possibility this time last year, but thanks to Europe's impressive ability to continue screwing things up, here we are!

While the underlying story continues to be about Europe, we got a surprisingly strong boost from today's Retail Sales data.  This made for a very nice tag team performance with the European Court of Justice's long-anticipated assessment on the ECB's current bond buying safety net.  The implication is that the ECB faces one less hurdle in announcing a more user-friendly QE program either this month or next.

Retails Sales and the European news account for most of the morning's rally.  Levels held refreshingly steady until 2pm, when a big bounce back in equities markets and oil fueled a "risk on" trade.  While that did result in steady and somewhat significant weakness, 5pm levels are still the best they've been since early May 2013.

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
102-21 : +0-06
FNMA 3.5
105-05 : +0-04
FNMA 4.0
106-25 : +0-02
2 YR
0.5010 : -0.0398
10 YR
1.8620 : -0.0431
30 YR
2.4730 : -0.0290
Pricing as of 1/14/15 5:04PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:32PM  :  ALERT ISSUED: Slightly More Serious Reprice Risk Now
2:24PM  :  ALERT ISSUED: Early Heads-Up on Shift in Trend; Negative Reprice Considerations
9:27AM  :  ECJ Court Opinion + Retail Sales = New Long-Term Yield Lows for Bonds

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "right on the edge of that acceptable range, and with a weaker BTC, so ... C-"
Matthew Graham  :  "RTRS- U.S. 29-YEAR 10-MONTH BOND BID-TO-COVER RATIO 2.32, NON-COMP BIDS $3.32 MLN"
Matthew Graham  :  "30yr Auction Preview (if the jargon confuses you and you want to learn more: http://mndne.ws/1gIJmzh): This is a "reopening" as opposed to a "refunding." Reopenings tend to have better bid-to-cover in 30s. Average has been 2.56 vs a 2.31 for refundings. There's no clear bias towards beating or missing the 1pm consensus on the yield, but it's currently trading at 2.412. A big beat or miss would be 3bps or more. 30yr auctions routinely beat/miss by 2+ bps. Meaning 2.432 to 2.392 would be a normal range for the high yield at this auction based on current 'when-issued' trading. "
Matt Hodges  :  "consolidation at this levels might be healthier than continued moves down... pricing gets whacked, renos zap profit, not great for us"
Nathan Miller  :  "i'm locking as they come, when it does goes up it's quick"