Although MBS are not yet back to the highs of yesterday's session, even being close is a fairly significant improvement from this morning. 10yr yields are down to 2.175 now, unchanged on the day. Meanwhile MBS are into the green:

-Fannie 3.5's are up 6 ticks at 101-11
- Fannie 4.0's are up 3 ticks at 103-15
- Ginnie 3.5's are up 4 ticks at 103-08

Lenders that hadn't released pricing already may delay initial sheets a bit, or simply come out with less aggressive pricing with the potential to reprice for the better later in the day. Lenders who priced earlier this morning might reprice for the better if current levels prove that they can stick around for a bit.

Although MBS were able to start the session in similar territory to yesterday's 5pm levels, things have deteriorated this morning. Longer-dated Treasuries are higher in yield (bigger moves with each longer maturity, i.e. 30's worse, 2's best). Here's a run-down of levels currently

- Fannie 3.5's down 5 ticks at 101-00
- Fannie 4.0's down 4 ticks at 103-09
- Ginnie 3.5's down 6 ticks at 102-30
- 10yr Yields up 4 bps at 2.2156

CPI came in near expectations, not a big market mover. But HOUSING STARTS, of all things, actually may have had some sort of negative effect on bond markets--albeit slight--as it came in significantly hotter than expectations, up 15% vs a forecast for falling 5%. We'd point out though that if you see a chart of housing starts, the "15% vs -5%" looks nothing like the reality. That looks more like someone throwing a deflated basketball off a roof that pathetically hits the ground and rolls excruciatingly sideways. >br/>
All in all, it's been a choppier-than-average morning, which stands a good chance to make rate sheets weaker than yesterday's latest offerings unless things turn around fairly quickly.