MBS has opened slightly worse.  I would expect pricing to be a little worse than yesterday.

Bond prices rose sharply on Monday, feeding off of the stock market weakness and the follow-through from last week's rally as the sentiment pendulum continued to swing. The Fed's Senior Loan Officer Survey found continued tightening of lending standards, widening of spreads, and declining loan demand. The pace of change, however, slowed from prior surveys. Banks expected standards to remain tight through the second half of 2010. Even while the Fed is overseeing the wind down of its Treasury purchase program, it announced an extension of the TALF program on Monday. The extension was widely expected and will carry the program through March 2010 for new ABS and legacy CMBS and through June 2010 for new CMBS. This morning, stocks are recovering some of Monday's losses and bond prices started the day a touch lower. Bonds have, however, recovered some of the mild overnight losses following this morning's economic releases. PPI fell a greater-than-expected 0.9% and the core rate fell 0.1% in July. PPI has, however, been of diminished importance of late. Housing starts and building permits were a touch weaker-than-expected. Several retailers reported earnings which were impressive but driven by cost cuts and margin expansion rather than consumer spending strength.