• RTRS - US CONSUMER SENTIMENT PRELIMINARY JAN 74.0 (CONSENSUS 71.5) VS FINAL DECEMBER 69.9
• RTRS - CURRENT CONDITIONS INDEX PRELIMINARY JAN 82.6 (CONSENSUS 80.2) VS FINAL DEC 79.6
• RTRS - CONSUMER EXPECTATIONS INDEX PRELIMINARY JAN 68.4 (CONSENSUS 65.0) VS FINAL DEC 63.6
• RTRS - 12-MONTH ECONOMIC OUTLOOK INDEX PRELIMINARY JANUARY 79 VS FINAL DEC 70
• RTRS - 1-YEAR INFLATION OUTLOOK PRELIINARY JAN 3.2 PCT VS FINAL DEC 3.1 PCT
• RTRS - 5-YEAR INFLATION OUTLOOK PRELIMINARY JAN 2.8 PCT VS FINAL DEC 2.7 PCT
• RTRS - CONSUMER SENTIMENT INDEX AND EXPECTATIONS INDEX AT HIGHEST SINCE MAY
• RTRS - CONSUMER CURRENT CONDITIONS INDEX HIGHEST SINCE FEBRUARY

“We’re entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior. Unfortunately, we expect this momentum to slow as we move through the first half of the year,” said Fannie Mae Chief Economist Doug Duncan. “2012 will be replete with policy changes and challenges that involve the global economy, the domestic economy, and the housing sector. We expect the net effect will be a year of moderate growth edging away from the 2011 threat of a double dip.”

MBS are showing their underperformance on the week despite a post-data rally this morning. Fannie 3.5's are up 4 ticks higher at the moment at 103-06, but 10's rallied at a bit of a healthier clip, down 3.8bps on the morning to 1.8879. This after being as high as 1.94% in the overnight session, but rallying back to 1.90 by the open on news that Italy's 3yr auction met with only a 1.28 bid-to-cover.

Of the two economic reports released this morning, Import/Export prices was a relative non-event. That leaves the International Trade report as the bigger mover, due to its implications on GDP. If that sounds like not much of a motivation for 10's to be down 4+ bps, keep in mind that most of the movement was seen before the data. Additionally, Treasury traders seemed to be the first to "figure it out" regarding Int. Trade implications and now that equities futures are following suit to a greater extent, bonds are getting more comfortable at the week's lows.

MBS, however, are not at their best levels of the week, as they've been in the process of reversing an aggressive tightening trend that took Fannie 30 yr current coupons to their lowest yields vs 10yr Treasuries since early August. Even so, MBS are "along for the ride" with Treasuries enough to be well into the green, with positive rate sheet implications for lenders who price before 9:55am Consumer Sentiment (and those who price after, for that matter, as long as the report doesn't cause a massive reversal, which would be a tall order without help from something else).

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total November exports of $177.8 billion and imports of $225.6 billion resulted in a goods and services deficit of $47.8 billion, up from $43.3 billion in October, revised. November exports were $1.5 billion less than October exports of $179.4 billion. November imports were $2.9 billion more than October imports of $222.6 billion. In November, the goods deficit increased $4.6 billion from October to $63.2 billion, and the services surplus increased $0.1 billion from October to $15.4 billion. Exports of goods decreased $1.5 billion to $126.6 billion, and imports of goods increased $3.1 billion to $189.7 billion. Exports of services were virtually unchanged at $51.3 billion, and imports of services decreased $0.2 billion to $35.9 billion. The goods and services deficit increased $8.9 billion from November 2010 to November 2011. Exports were up $16.6 billion, or 10.3 percent, and imports were up $25.5 billion, or 12.7 percent.

• RTRS -NOV TRADE DEFICIT $47.75 BLN (CONSENSUS $45.00 BLN) VS OCT DEFICIT $43.27 BLN (PREV $43.47 BLN)
• RTRS -NOV TRADE DEFICIT LARGEST SINCE JUNE 2011 ($52.10 BLN)
• RTRS -NOV EXPORTS -0.9 PCT VS OCT -0.7 PCT, IMPORTS +1.3 PCT VS OCT -1.0 PCT
• RTRS -NOV GOODS DEFICIT $63.18 BLN, SERVICES SURPLUS $15.43 BLN
• RTRS -NOV EXPORTS $177.84 BLN VS OCT $179.37 BLN, IMPORTS $225.59 BLN VS OCT $222.64 BLN
• RTRS -NOV CAPITAL GOODS IMPORTS RECORD HIGH $43.83 BLN VS OCT IMPORTS $43.71 BLN
• RTRS -CHINA NOV TRADE DEFICIT $26.87 BLN VS OCT DEFICIT $28.07 BLN
• RTRS - US-OPEC NOV TRADE DEFICIT $9.11 BLN VS OCT DEFICIT $8.31 BLN
• RTRS -NOV OIL IMPORT PRICE $102.50/BBL VS OCT $98.84/BBL, +33.4 PCT FROM NOV'10 $76.81/BBL

"U.S. import prices edged down 0.1 percent in December, the U.S. Bureau of Labor Statistics reported today, after rising 0.8 percent the previous month. In December, declining prices for fuels more than offset a 0.1 percent rise in nonfuel prices. Export prices also decreased in December, falling 0.5 percent following a 0.1 percent advance in November."

• RTRS - IMPORT PRICES -0.1 PCT (CONS. -0.1 PCT) VS NOV +0.8 PCT (PREV +0.7 PCT)
• RTRS - EXPORT PRICES -0.5 PCT (CONSENSUS +0.1 PCT) VS NOV +0.1 PCT
• RTRS - PETROLEUM IMPORT PRICES -0.4 PCT VS NOV +3.8 PCT
• RTRS - YEAR-OVER-YEAR IMPORT PRICES +8.5 PCT, EXPORT PRICES +3.6 PCT
• RTRS - NON-PETROLEUM IMPORT PRICES UNCHANGED, YEAR-OVER-YEAR +3.3 PCT