MBS LUNCH: Uneventfully Coasting Into The Weekend

With absolutely no exaggeration, all but one, maybe two of the times I've looked at my screens before writing this week MBS have been between -2 and +2 ticks on the day while changes in tsy's have been more pronounced.  Same story today, at least on a price level, as 4.5's are up 2 ticks to 101-23 whereas 10's are down 6 ticks, bringing the yield up to 3.362.  Neither of those levels are especially interesting as they both lie above levels that have supported 99% of the trade this week.

For MBS, the level is obviously 101-21, which has received more than its fair share of mention this week, and likely needs no further introduction.  And though we haven't seen much of it this week, the 3.38 lvl in tsys is equally significant.  It just draws more of it's credibility from weeks past. 

I pointed out a "careful!" in the chart above as tsy's flirt with breaking a downtrend in yields.  But the white circle on the volume forest also shows that volume picked up in response to the better buying opportunity, and on a Friday afternoon, that says a bit more than normal about the range.  So at the risk of being too firm, I'm callin' it...  3.38 won't be broken with volume for the rest of the day.  MBS won't break below 101-21 with volume either.  That means lenders that haven't repriced yet, probably won't...

10 yr tsy futures aren't providing nearly the same level of clarity however...  We'll get to a more robust discussion of this chart in the close today.