MBS LUNCH: Off Recent Lows, But Off Recents Highs As Well

The first dose of the much anticipated return of volume is seeing some volatile price movements.  After a morning low at 99-25, 4.5's made it all the way to 100-05, a gain of .375, just after 11am.  Though choppy, prices have generally fallen since then but have not gone lower than 99-29 this time.  Dare we say PARNERTIA? 

10's are similarly choppy.  You can also see that although this AM's data led to improvements, yields backed up fairly quickly and put us right back in the range of the morning's pre-data trading.    That might suggest we see resistance to 3.83 mark, in which case, be on high alert for any major breakage at 3.85.  Even if that occurs, although the first day of 2010 hasn't been a face-melting correction rally, MBS are positive on the day, and are paradoxically down in coupon (more price gains the lower the coupon rate) versus the yield curve which has done a fair amount of steepening.