MBS AFTERNOON: Reprices For The Better Likely

• MBS well into their highs of the day + 6 ticks on 4.5's at 101-08
• 8 tick price different in 10yr notes remains as they are down 2 ticks now, yield 3.62
• gains follow beige book.  causality is a tenuous argument.  more like "lack of surprise"

Yesterday, we made ongoing fuss over technical levels in tsy's at PAR on the 10yr at 3.625, as well as the 3.615 which seems to be a constant gardener this week.  (not sure why it's a "gardener" but it sure has been constant...  maybe something to do with "hedges."  I'll think on it and get back to you...)

So note the stutter step in tsy yield right at 3.625 both this AM and just recently.  If the market is so inclined to rally further, the lower line at 3.615 is as good of a target as any for the last few hours of trade, but as always, in the absence of 2 things--VOLUME or a headline TAPE BOMB (which usually brings volume with it anyway)--whatever movements in Tsy yield or MBS price come this afternoon are of little importance in tomorrow's context with another data-rich day and another day closer to NFP.

If you haven't seen reprices for the better already, today is just like yesterday in that there is a high liklihood they are on their way.  Don't read that as "float into tomorrow" however, unless that was already on your radar, but simply to wait until closer to cut off if you haven't seen a reprice yet.