The overnight session was both informative and positive for bond markets.  The informative part was the technical floor seen in 10yr yields (2.20) and in German Bunds (.56) for that matter.  Both of the world's predominant bond market benchmarks bottomed out at the same yields that blocked yesterday's progress.  At that point, sellers stepped in, sensing that we'd seen the bottom of our near-term range.

The weakness didn't last long before oil prices and falling stocks were contributing to a flight-to-safety trade for the 2nd day in a row.  Oil continues to be the more interesting of the 2, with another relatively brisk move to new 6-year lows (close to 7 year lows, actually).  At today's lows, a barrel of oil was as cheap as $36.64--twice as cheap as the average prepper's 55 gallon barrel of water.

Bunds and Treasuries were dragged lower in yield heading into the domestic session.  This resulted in stronger opening levels for both MBS and Treasuries.  Notably though, trading levels never made it past yesterday's best levels.  Deterrence came in the form of a big bounce in Oil although Bond markets had already clearly rejected the technical break before oil fully recovered.  Serving as a counterpoint to that technical resistance, we have technical support overhead (in 10yr yields) at 2.24.  Now it's a bit of a waiting game to see if we break the floor or ceiling first.


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
100-12 : +0-01
FNMA 3.5
103-18 : +0-01
FNMA 4.0
106-04 : +0-00
Treasuries
2 YR
0.9430 : +0.0080
10 YR
2.2320 : -0.0040
30 YR
2.9640 : -0.0010
Pricing as of 12/8/15 2:11PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:11AM  :  ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ira Selwin  :  "To throw another wrench into that Blake, there's also Fannie mae guidelines 9aside from state/fed)"
Blake Carrillo  :  "Lender specific. In my case this is WF specific and I am told that we adhere to the state specific or more borrower friendly guideline. Still nothing to back that up though."
Blake Carrillo  :  "JT i was not aware either, but the Protections Act does outline that lenders can take state specific guidelines over the FED. That being said, the state guidelines cannot extend beyond midterm, so it would be a benefit purely to the customer. I am told it will be outlined in the note, but I have not seen it..."
John Tassios  :  "I never knew state reg's would take precedent over the FED reg's. Would this be typed in the NOTE or as a Rider to say removal of PMI at midterm in Virginia?"
Dominick Cordone  :  "that's a tough 1 since, if true, would need to be researched by state, rather than in a handbook I would think"
Blake Carrillo  :  "Sorry all, yes Virginia. My understanding of late, or rather what I have been influenced to believe :), is that there are state specific restrictions to this timeline and WF for instance, adheres to the state over the broader reaching guideline of "midterm" removal."
Matt Hodges  :  "Virginia?"
Blake Carrillo  :  "Does anybody know the max period of time PMI can remain on a loan, specific to VA? I know the Consumer Protection Act of 98' restricts this to no longer than mid term, but I heard VA has a more specific timeline that most banks honor. Trouble is, I can seem to find details to back this up."
Matthew Graham  :  "If it rains as hard as it did yesterday, I'm going to need enough lumber to build an ark, which I assume would be expensive."
Matthew Graham  :  "I will be spending upwards of $500 today, due to weather"
Christopher Stevens  :  "listening to CNBC this morning and I hear this- retail sales will be down because the weather is just too nice in much of the country. People are not buying jackets/sweaters and just not shopping." So if the economy is slow for the qrtr blame the good weather this time. I'm still laughing."
Matt Hodges  :  "gm gents. December is the month to make hay for 2016. Other LOs might slack off with their marketing this month, but not ones in MBS Live."