8:50am ET - Market Extends Gains:  Treasuries continue to regain ground.  The data helped a bit & Snow's repetitive comments on CNBC could not hurt trade.  Yields on the 10-yrs are back near last week's lows while the 2-yrs are hanging tight.  The curve has resumed the flatter stance, with the 2-10-yr yield spread narrowing below 9.

8:41am ET - Separate from the record Oct trade deficit is the release of Nov import prices which fell -1.7% (7% yoy).  The -8% drop in petroleum prices followed the -1% Oct decline as ex-petrol prices edged -0.2% lower in Nov.  Overall export and ex-agricultural export prices fell -0.9% as industrial supplies (including energy) provided the direction.

8:36am ET - The Oct trade deficit unexpectedly widened to a new record -$68.9 bln.  Exports rose 1.7% as the 2.7% rise in imports matched the strong Sept gain.  Petrol imports rose with volume despite the lower price of crude oil.  On the export side a large 6% rise in capital goods (huge jump in aircraft) was largely offset by a fall in consumer goods. The deficit with China again reached 30% of the total as the Pacific Rim stands just shy of half the entire deficit.

8:18am ET - A retreat from the Sep record trade deficit is foreshadowed by the drop in energy prices and the flows from the L.A. and Gulf Coast ports.  Both imports and exports are running at record levels as their relative size -- imports 50% larger than exports -- provides the force.  China's 30% weight is the weak point given the stickiness of the 'depegged' yuan to the dollar.

8:13am ET - Treasuries Jump Ahead: The market has forged higher on reassurance from yesterday's policy statement that inflation is well contained knocking yields back down. The 10-yr yield fell below the technically sensitive 4.500% level to hit 4.494% while the 30-yr yield dropped to 4.699%. Two-years remain unchanged to tilt the 2-10-yr yield spread narrower to 9.8 from a 11.7 late yesterday. EuroZone bonds rose on reports that inflation is under control while relatively higher yields in Japan attracted investors to bonds in that country after positive economic data. Trade will likely be subdued with pronounced swings on light pre-holiday volumes as technical levels factor in.  The holiday season will continue to infect trade with sketchy liquidity prompting jumpy reactions on data & official comments. The dollar tanked against the yen after following the Tankan business confidence report at 18:50, giving back 1.6% to 118.39.  The euro took back nearly 1.2% as the market has decreed US rate hikes will slow.  Spot gold lost some of its shimmer, dropping back to 510.90, a solid 3.6% dent from yesterday's highs. Crude has dipped a bit, sitting at 61.34 (-0.03) & will be a victim of the low volume/jumpy trade as well, with inventories due out later today. Data on tap are some mediocre numbers that will do little to bounce the market, including the always dismal trade balance number, import & export prices.  Greenspan is getting a diploma after the close, but he probably won't be preaching policy during the acceptance.

7:34am ET - Geopolitical Update: Iraq locks down before parliamentary election. US, EU sparring sours world trade talks. Israel approves 200 homes in W. Bank settlement... (Reuters). Blair to present softened EU budget proposals. Tankan shows broad based recovery in Japan. Court upholds EU ban on GE, Honeywell takeover. US ahead in producing technologists... (FT.com). US gov begins pilot project to unravel genetic makeup of cancer... (WSJ). Iraq bomb kills four US soldiers near Baghdad... (Bloomberg).

7:16am ET - Mortgage Applications: The weekly MBA mortgage applications index dropped -5.7% last week, with purchasing applications falling -3.5%, and refinancing plummeting -9.7%. The fixed 30-yr mortgage rate actually fell 4 basis points to 6.28% while the 15-yr nudged lower 1 bp to 5.83%. The 1-yr adjustable rate mortgage rate bumped up to 5.50%.

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