Initial Jobless Claims were released this morning at 830am showing a small 2k increase from 437,000 last week.  The 439k was basically dead on with consensus calls for 440k claims. Although we've been looking for bond trading to reestablish some sort of connection with market data, at this point, the steep losses and moderate rebound so far this morning in bonds appears more technically driven than a function of any sort of reaction to data.  Fannie 4.0's are 4 ticks lower overall, and the 10yr note sits at 2.91 after rising as high as 2.94 this morning. 

Here are the details on claims:

RTRS-US JOBLESS CLAIMS ROSE TO 439,000 NOV 13 WEEK (CONSENSUS 440,000) FROM 437,000 PRIOR WEEK (PREVIOUS 435,000)

RTRS-US JOBLESS CLAIMS 4-WK AVG FELL TO 443,000 NOV 13 WEEK FROM 447,000 PRIOR WEEK (PREVIOUS 446,500)

RTRS-US CONTINUED CLAIMS FELL TO 4.295 MLN (CON. 4.300 MLN) NOV 6 WEEK FROM 4.343 MLN PRIOR WEEK (PREV 4.301 MLN)

RTRS-US INSURED UNEMPLOYMENT RATE FELL TO 3.4 PCT NOV 6 WEEK FROM 3.5 PCT PRIOR WEEK (PREV 3.4 PCT)

RTRS-US JOBLESS CLAIMS 4-WK AVG LOWEST SINCE SEPT 2008, CONTINUED CLAIMS LOWEST SINCE NOV 2008

That last bullet regarding claims being at their lowest level since Nov 2008 begs for a chart.  This one shows the evolution of continuing claims (in teal) as well as the choppier weekly initial claims (in red).  Seems like some resistance around current 440k-ish levels...

Here's a look at how MBS and Treasuries are faring this morning versus yesterday.  101-19 looks to be a valid horizontal technical level to watch in 4.0's.  (remember those intraday pivots!)

That MBS chart is the first hint at a technically motivated market, but when we look at the more technically germane treasury market, additional and more convincing arguments for a technical construction emerge.  To wit, please note that YET AGAIN, we have morning action in 10yr notes opening up in line with the trend that began in the middle of the previous session!  Today, it's an uptrend in yields, providing a clear breakthrough goal if yields hope to get at least sideways and maybe even on a a path to improvement today.  But one thing at a time...

Another fantastic argument for technically motivated trading is the exact coincidence of low prices in 10yr futures at 124-11.  I'd be heavily inclined to keep an eye on that level as a great reminder that I should check my MBS pricing if 124-11 breaks in futures to see to what extent MBS may be following suit.

Finally, some hope...  I wish I were more inclined to believe that we won't need to touch 3% in 10's before "the bottom is in," but looking at a slightly longer term chart, we can see a VERY tame attempt to establish a downwardly sloped range in 10yr yields, leading AWAY from the worst levels (2.96-ish).  I'm nowhere near convinced this range will hold, but I would watch both sides of it for a break, and be more and more interested in doing so the longer the boundaries hold. So perhaps we'll get a chance to see it hold today, which would be nice considering it would likely coincide at least with an absence of further deterioration in MBS pricing. 

But as one blind man said to the other, "we'll see what we'll see..."