MBS LUNCH: Narrow And Stable In New And Improved Range

The bulk of the gains today came in hours between 8am and 10am, surrounding Econ Data.  As bonds rallied off yesterday's auctions and Econ data, that rally was ALLOWED to extend this AM by more underwhelming econ data.  And so the next logical stop for bonds has been just under and around the 3.68 milestone in the 10yr.  That puts us solidly through the "challenge" level outlined below.  You can also see the fence on which MBS currently sit at December's lowest pre-sell-off prices.

After the long weekend, you may be able to see the next logical challenge to ongoing improvements at december's highs around 3.6.  As AQ pointed out earlier, as the calendar of data and holidays returns to a semblance of normalcy, the stock lever is potentially important.  It's given us everything we need so far today by throwing out some sizable losses, but considering that the general uptrend of "higher lows" remains intact, anything is possible going into the upcoming 4 day week.

4.5's are up 13 ticks to 100-25.

The 10yr is up 18 ticks, good for a yield drop to 3.67%.

The Dow is down over a hundred points and the S&P down well over 10 points.