The timing of this morning's gains are potentially frustrating depending on the lender from whom you're hoping to see improved pricing. Some released rates well enough before recent gains that a reprice for the better wouldn't be out of the question. Many others came out a bit "too recently" for current gains to suggest reprices for the better.

So this is one of those situations where you'll have to "know your lender" and have some sort of idea of what past precedent suggests about their repricing behavior. We can tell you though, that Fannie 3.5's are up 14 ticks at 101-11 and 10yr yields are testing an important floor in the 2.15's (currently at 2.159).

Finally, there's the element of "suddenness" of this rally. It may keep going or it may bounce. Too soon to tell for sure, but so far, the reprice outlook is certainly positive.

(Reuters) - U.S. consumer confidence unexpectedly dropped in October to its lowest level in two-and-a-half years as consumers fretted about job and income prospects, according to a private sector report released on Tuesday.

The Conference Board, an industry group, said its index of consumer attitudes fell to 39.8 from a upwardly revised 46.4 the month before. It was the lowest level since March 2009.

Economists had expected the index to rise to 46.0, according to a Reuters poll. September was originally reported as 45.4.

The present situation index slipped to 26.3 from 33.3, while the expectations index declined to 48.7 from 55.1. The expectations gauge was also at its lowest since March 2009.

"Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased," Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.

Consumers' view of the labor market was mixed. The number of respondents that said they found "jobs plentiful" fell to 3.4 percent from 5.6 percent. However, the "jobs hard to get" category eased to 47.1 percent from 49.4 percent.

The assessment of price increases was unchanged with expectations for inflation in the coming 12 months at 5.8 percent. (Reporting by Leah Schnurr, Editing by Chizu Nomiyama)

Dow Jones Newswires and Bloomberg had headlines moments ago indicating a meeting between several Finance Ministers in the EU tomorrow was cancelled. This meeting was scheduled to occur before tomorrows much-anticipated EU Summit (which is still on).

Even so, the news sent stocks shooting lower at the open and Treasury yields followed. MBS added a few ticks and now things have flattened out a bit as some market participants are realizing the news didn't refer to the Summit itself.

It's clear that markets are waiting for waiting for whatever it might be that comes out tonight's EU Summit. Stock futures ticked up just a bit higher than yesterday's closing levels a few minutes before the New York open, but have since come back down a bit. 10yr yields are essentially flat at 2.235 and THINLY TRADED MBS are showing 7 ticks better in Fannie 3.5's (101-04) at the moment, significantly outperforming Treasuries as HARP 2.0 is continually seen as progressively more anticlimactic.
For those market participants that choose to pay any attention to the screens today ahead of EU Summit News, Case-Shiller is coming up shortly and then the "biggie" of the morning at 10am with Consumer Confidence. Also, don't forget the 2yr note auction at 1pm.

On a tactical note, ranges could get rather wide today. We're flat now, but it wouldn't be out of the realm of possibility for 10yr yields to aggressively test 2.25/26 or more timidly test 2.30. Not saying that's LIKELY to happen, merely that it COULD and that wouldn't ruffle our feathers unless it was A) Breaking higher and B) After the EU Summit.