*Big decline in headline, from 20 to 7
* "shipments" component down to +2 from +25 last month

Manufacturing activity in the central Atlantic region expanded in March for the fourth straight month, but at a more temperate pace than a month ago, according to the Richmond Fed's latest survey. All broad indicators — including shipments, new orders, and employment — continued to grow but at a rate below February's pace. Most other indicators also suggested moderate activity. District contacts reported capacity utilization grew more slowly, while backlogs held steady. Likewise, delivery times and finished goods inventories grew at a modestly slower rate.

Looking forward, assessments of business prospects for the next six months were generally in line with last month's readings. Contacts at more firms anticipated that shipments, new orders, backlogs, capacity utilization, and capital expenditures would continue to grow at a solid pace in the months ahead.

Survey assessments of current prices revealed that both raw materials and finished goods prices grew at a somewhat quicker rate in March than a month ago. Over the next six months, respondents expected growth in both raw materials and finished goods prices to rise at a somewhat faster pace than they had anticipated last month.

* Confidence down to 70.2 (forecast 70.3) from 71.6 last month
*Present Situation index improved and expectations declined
* 1yr Inflation Expectations highest since May 2011
* Present situation highest since 9/08

The Conference Board Consumer Confidence Index®, which had increased in February, pulled back slightly in March. The Index now stands at 70.2 (1985=100), down from 71.6 in February. The Present Situation Index, however, increased to 51.0 from 46.4. The Expectations Index declined to 83.0 from 88.4 in February.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was March 15.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer Confidence pulled back slightly in March, after rising sharply in February. The moderate decline was due solely to a less favorable short-term outlook, while consumers’ assessment of current conditions, on the other hand, continued to improve. The Present Situation Index now stands at its highest level in three and a half years (61.1, Sept. 2008), suggesting that despite this month's dip in confidence, consumers feel the economy is not losing momentum."

MBS and Treasuries opened in better territory this morning and have been holding in a steady range ever since. Although the overnight session was a bit less calm by comparison (yields revisited the 2.26's), it was nonetheless rather uneventful with no major range-breaking concerns and fairly light volume. Fannie 3.5s are currently up a quarter of a point (8 ticks) to 102-22, the highest they've been since the initial March sell-off on 3/13-3/14.

Case Shiller Home Prices did little, if anything to move markets and Consumer Confidence, moments away, would probably have to offer something other than a nominal deviation from expectations in order to do so.

There's a truck-load of additional data starting at the same time though... Richmond Fed Index, Dudley speech, Fed Twist buying begins, all right around the same time, with Bernanke on the horizon at 1245pm and 2yr Treasury Note Auction at 1pm. The auction is likely a non-event, but results that are very far from expectations could still have an effect.

* Home Prices 0.0 Pct (Consensus -0.2) Vs Decr -0.5 Pct
* Home Prices -0.8 Pct Non-Adjusted (Consensus -0.6) vs Dec -1.1 Pct
* Jan 20-Metro Area Home Prices -3.8 Pct (Consensus -3.8 Pct) From Year Ago
* Composite Index Lowest Since December 2002

Data through January 2012, released today by S&P Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed annual declines of 3.9% and 3.8% for the 10- and 20-City Composites, respectively. Both composites saw price declines of 0.8% in the month of January. Sixteen of 19 MSAs also saw home prices decrease over the month; only Miami, Phoenix and Washington DC home prices went up versus December 2011. (Due to delays in data reporting, the January 2012 index values for Charlotte are not included in this month’s release).

Eight MSAs and both Composites posted new index lows in January. The 10- and 20-City Composites recorded marginal improvements in annual returns over December 2011 when they each posted -4.1%. In addition to the Composites, Dallas, Denver, Miami, Minneapolis, New York, Phoenix, San Diego, Seattle, Tampa and Washington DC saw their annual rates improve compared to December; while nine of the MSAs saw their annual returns worsen compared to what was reported for December 2011. Denver, Detroit and Phoenix were the only cities to post positive annual growth rates of +0.2%, +1.7% and +1.3