MBS LUNCH: RATES REBOUND?

The heart-pounding and nail-biting moments of utter catastrophe seem to have subsided at the moment.   With about an hour and a half left until 3pm marking, and with what will likely end up being 90% of today's volume behind us, any rate market considerations beyond the intraday-lock-alert variety have sufficient data to draw conclusions.  So what might that conclusion be?

In short, when rates are marked at 3pm, barring a bona-fide tape bomb, the benchmark 10yr yield will remain under 3.56.  Even though this is not a "bullish" conclusion, it at least allows rates to live to fight another day.

4.0 MBS are down 8 ticks at 98-10

4.5 MBS are down 5 ticks at 101-05

10yr Tsy's are up in yield 3.6bps to 3.535

yield curve remains steep at 273.7 bps

Breaking News: House rejected the portion of the financial reform bill that would have allowed bankruptcy judges to alter the terms of a borrower's mortgage note