MBS Day Ahead: Econ Data Ramps up; How Well are MBS Doing?

Yesterday was a fairly solid day for bond markets.  Although it suffered from decreased participation, there was still strong support at technical ceilings and a good responsiveness to economic events and headlines.  At least that seemed to be the case based on the timing of the headlines combined with the ostensible market reaction.

Today will offer a better chance to put that to the test.  There are a few important pieces of data in Europe that will already have printed by the time you read this.  Then we get the 2nd reading of Q3 GDP at 8:30am followed by Consumer Confidence at 10am.  Several other reports dot the calendar, but those are the only market movers in terms of econ data. 

The afternoon's 5yr Treasury Note Auction warrants extra attention at 1pm after yesterday's 2yr Note auction proved to be a much more capable market mover than any other 2yr auction in years. 

The chart below doesn't relate to any of the text above.  I just felt like we should check in on a long term chart of Fannie 3.5 MBS.  I'm liking this November a lot better than last year's!  (It's hard to tell based on the chart, but from the start of the month to Thanksgiving, Fannie 3.5's had fallen almost 2 points last year).