MBS are up +17/32 (FNMA 30-yr 3.0 at 103.17), around 23/32 above morning levels, and at the high for the day. Favorable repricing took place. An important election took place in Italy, and the results will not be known until tomorrow morning. Polls early this morning pointed to a solid victory by the party friendliest to EU reforms, and MBS moved lower. Later in the day, however, it appeared that the race was much closer. The center-left party (which supports reforms) and the center-right party appear to be nearly even, and the third place party gathered much more support than expected. It will be very difficult to establish a coalition government when no party has a majority, and another election may be required. What's clear is that there is significant resistance in Italy to austerity measures, and investors are concerned that the third largest economy in the EU may scale back reform measures. The uncertainty caused a flight to safety, helping MBS and hurting stocks. The D ow is down 220 points. Tomorrow will be a big day. The Italian election results will be one major story. Fed Chief Bernanke will testify before Congress at 10:00 et. New Home Sales and Consumer Confidence will be released. The results from the 5-yr Treasury auction will come out around 1:00 et.