FHFA Acting Director Edward J. DeMarco responded to a letter from numerous U.S. Senators regarding executive compensation at Fannie Mae and Freddie Mac. Read the Letter

Import prices fell for the third time in five months in October, declining 0.6 percent for the month. The decrease matched a 0.6 percent decline in June, the largest one-month drop since the index fell 1.2 percent in June 2010. The price index for overall imports fell 1.4 percent over the past five months, primarily driven down over that period by declining fuel prices. Despite the recent decreases, import prices advanced 11.0 percent over the past year.

Overall export prices fell 2.1 percent in October, driven lower by falling prices for both nonagricultural and agricultural exports. The October decline followed advances of 0.4 percent and 0.5 percent the two previous months. Despite the October drop, overall export prices increased 6.3 percent over the past year.

(Reuters) - New U.S. claims for unemployment benefits declined for the second straight week, to the lowest level since the first week of April, the Labor Department said on Thursday.

Initial claims for state unemployment benefits fell 10,000 to a seasonally adjusted 390,000 in the week ended Nov. 5, slightly below the 400,000 that analysts polled by Reuters had expected. The government revised its estimate for claims during the prior week to 400,000 from 397,000.

Weekly claims still remain well above pre-recession levels and have only dipped below 400,000 -- a threshold many economists believe signifies improving labor market conditions -- 10 times over the past year.

A Labor Department official said a freak fall snowstorm that kept many people housebound in the Northeast did not affect initial jobless claims.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 92,000 in the week ended Oct. 29 to 3.615 million. That was the steepest drop since February, and the lowest level since the week ended Sept. 20, 2008.

The four-week moving average of claims, considered a better measure of labor market trends, fell to 400,000 from 405,250 the prior week, which was revised up from the previously reported 404,500. (Reporting by Lisa Lambert, Editing by Andrea Ricci)

While it's plain to see that broader bond markets are weaker overnight, MBS specifically look weaker than they actually are. The settlement of November Fannie/Freddie 30's took place yesterday and the new "front-month" coupon is a December delivery. That means that yesterday's prices on the chart reflect November coupons while today's reflect December's, which closed at 101-22 last night, meaning that Fannie 3.5's are actually only 1-2 ticks weaker in this morning's trading--not bad!

The other glimmer of hope comes from the distinct double top in 10yr yields overnight at 2.05. Normally we wouldn't read much into technical developments from the nocturnal session, but volume was particularly good, approaching 300k 10yr contracts by 8am NY time vs 100-200 normally. Stock futures are making similar moves but closer to breaking higher past their best levels overnight.

The point about 2.05 in 10yr yields isn't exactly a suggestion that this will hold up as a supportive ceiling as much as it is to point out that it acts as a good line in the sand to let us know if we're at risk of losing more ground. To that end, this AM's economic data, in the form of Jobless Claims and Import/Export prices is coming up in just a few minutes and could serve as the impetus to either help 10's confirm their 2nd bounce lower off 2.05+ or break higher, forcing bond benchmarks to search for that next level of support.