Jan 2 2013, 11:06AM

MBS Live: MBS Morning Market Summary
Referring to the 11th hour passage of a Fiscal Cliff bill as a “deal,” is an overstatement.  But it’s at least a “mini-deal,” or depending on how important semantics are to you, a “quasi-deal.”  In other words, it alleviates some of the more serious concerns associated with the automatic spending cuts and tax hikes that would otherwise be going into effect today, but it’s definitely not a long-term fix.  Counterpoints notwithstanding, something is better than nothing in this case, and markets are behaving as expected, with stocks up and bond markets weaker.  But on both fronts, the moves are extraordinarily well-contained by recent ranges.  Furthermore, after the more brisk moves seen earlier in the morning, both stocks and bonds have leveled off well inside their respective extremes.  The biggest relative winner is MBS, which aren’t even remotely close to their recent lows of 104-04 on December 18th (when Cliffy optimism was at it’s highest).  After shaking off the morning volatility, Fannie 3.0s have been grinding against their highs of the day at 104-20 without suggesting much risk of revisiting morning lows of 104-13.  Lenders seemed fairly well-positioned for this volatility and rate sheets have only taken nominal lumps, to the tune of .25 worse than Monday on average.