The last bit of movement seen in MBS amounts to just under an eighth of a point, falling from roughly 100-22 to 100-19. 10 yr notes made it as low as 2.93 earlier today, but are now back in line with 830am levels near 2.95. Despite reasonable volume, we haven't seen any of today's more directional moves occur in direct response to econ data. In fact, movements in MBS look almost exclusively technical, having fallen perfectly in line withe the low end their recent range yesterday and now today, bouncing perfectly in line with the high end of that range. As was a strong possibility coming into today, markets look like they'll be lacking strong conviction in either direction in the absence of some "new news" on the debt-ceiling. The one caveat seems to be the 1pm 7yr note auction. Decent enough volume and movement was seen after yesterday's auction, that we would say 7yr results could have a similar impact, although we'd moderate that claim by pointing out that despite the good volume and the directional move yesterday, that bond yields opened up today's domestic session almost exactly on their 1pm levels from yesterday. There's a nice little short term pivot at 100-17 for MBS (or think of it as merely a serendipitous expression of the longer term 100-18 pivot) that can be watched for support. If that breaks, we'd dial up the vigilance meter and watch for 100-13 to 100-14 as a potential reprice indicator.

(Reuters) - Pending sales of existing U.S. homes unexpectedly rose in June from May and rose sharply from a year ago, data from a real estate trade group showed on Thursday. The National Association of Realtors Pending Home Sales Index, based on contracts signed in June, was up 2.4 percent to 90.9 from 88.8 in May. The index was up 19.8 percent from a year ago. Economists polled by Reuters ahead of the report were expecting pending home sales to fall 2.0 percent. The association's senior economist Lawrence Yun said the latest monthly reading shows tight credit and economic uncertainty is still constricting the market. "The best way to ensure a more solid recovery in housing is to simply return to normal, sound credit standards so more creditworthy home buyers can get a mortgage," he said. (Reporting by Margaret Chadbourn; Editing by Neil Stempleman)

One economic event down, and a few more to go before we see the extent to which such things are having less of an impact on trading than they otherwise might without the debt ceiling debate ongoing. For instance, even though Jobless Claims just fell below 400k for the first time since April, 10yr treasury yields are currently are only a few thousandths away from the levels at which they were trading before the report, with only a muted response seen over the last 25 minutes. MBS are a tick higher than 830am levels which were already moderately improved from yesterday, currently up 11 ticks at 100-20. That said, bonds look to be picking up some rally steam, which, if it continues, will make for noticeably improved rate sheets. The next major data is in about an hour with Pending Home Sales.

(Reuters) - New U.S. claims for unemployment benefits fell more than expected last week, dropping below the key 400,000 level for the first time since early April, according to a government report on Thursday that pointed to some labor market improvement. Initial claims for state unemployment benefits dropped 24,000 to a seasonally adjusted 398,000, the Labor Department said. Economists polled by Reuters had forecast claims falling to 415,000. The prior week's figure was revised up to 422,000 from the previously reported 418,000. Employment growth stumbled badly in May and June, with the increase in nonfarm payrolls totalling only 43,000. The government is expected to report on Friday that the economy grew at a 1.8 percent annual rate, according to a Reuters survey, after a tepid 1.9 percent pace in the first three months of the year. On Wednesday, the Federal Reserve said growth slowed in much of the country in June and early July. A Labor Department official said there were no special factors in last week's jobless claims data. The four-week moving average of claims, considered a better measure of labor market trends, fell 8,500 to 413,750. The number of people still receiving benefits under regular state programs after an initial week of aid declined 17,000 to 3.70 million in the week ended July 16. Data for the so-called continuing claims covered the survey week for the household survey from which the unemployment rate is derived. The jobless rate rose to 9.2 percent in June from 9.1 percent in May. The number of Americans on emergency unemployment benefits rose 18,427 to 3.17 million in the week ended July 9, the latest week for which data is available. A total of 7.65 million people were claiming unemployment benefits during that period under all programs, up 320,152 from the prior week. (Reporting by Lucia Mutikani, Editing by Andrea Ricci)