Treasuries had a fairly uneventful overnight session--this time paying much more attention to the movement in European bond markets (not the case yesterday).  It's somewhat significant, perhaps, that both US and German 10yr yields just barely failed to break late August lows.  This is a closely-watched technical resistance event (i.e. failure to break to new lows is "bad"). 

Heading into the domestic session, Treasuries led the way back to the lows, but yet again, buying dried up before yields broke below the technical resistance.  European bond markets (Germany is the benchmark) led the way toward higher yields from there.  Unlike recent days with strong connection between stocks and bonds, equities markets have been playing catch-up today.

2014-10-8 combo

MBS have been faring a bit better than Treasuries, which is to be expected after underperforming during Treasuries' fast-paced rally.  Fannie 3.5s started weaker, swung stronger, and have now returned near unchanged levels.  10yr yields are up 1.6bps at 2.357.

The afternoon events include the 10yr Treasury auction at 1pm and FOMC Minutes at 2pm.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
99-25 : -0-01
FNMA 3.5
103-05 : -0-02
FNMA 4.0
106-05 : -0-02
Treasuries
2 YR
0.5080 : +0.0000
10 YR
2.3570 : +0.0161
30 YR
3.0680 : +0.0220
Pricing as of 10/8/14 12:43PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:02PM  :  ALERT ISSUED: Slight Increase In Negative Reprice Risk for Some Lenders
9:28AM  :  Bond Markets Regain Ground Lost Overnight; MBS Turn Green
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "If markets are indeed interested in FOMC minutes by way of confirming an underlying dovish tone that was missing from the reaction to the announcement, then auction considerations are completely insignificant today."
John Tassios  :  "may not happen this week until auctions are out of the way first. Maybe next week we may rally one more leg down in rates"
Gus Floropoulos  :  "if we can break through these levels it would be awesome"
Hugh W. Page  :  "Here's my optimistic view for today. 10 yr auction is strong giving us a little boost and FOMC minutes hide a little surprise for us that adds to it and we close above high for the year on the 3.5 FNMA... :) Who's with me?"
Matthew Graham  :  "perhaps momentarily. Not a momentum-changer though"
Hugh W. Page  :  "10 yr note auction pre minutes to have some influence?"
Christopher Stevens  :  "I think we rallied pre-minutes in what the market hopes to hear. Far more risk for rates moving up than seeing any further improvement imo"
John Tassios  :  "I think bond traders will not pay close attention to minutes one way or another. too many other forces at work in bond markets other than the FED minutes"
Bryce Schetselaar  :  "So who here thinks we rally after the minutes today?"
Mike Drews  :  "I'm feeling very locky this morning. Hoping rate sheets look good."
Matthew Carver  :  "gm all, agreed OO - great read this morning. "
Oliver Orlicki  :  "great read this AM mg"
Matthew Graham  :  "
A new 'Day Ahead' has been issued:
FOMC Minutes Today; High Stakes for Bond Markets"