Profit Taking Pushes MBS to Price Lows. Reprice Potential Rising

By: • Thu, Oct 21 2010, 11:25 AM

After failing to breach 2.46% resistance yesterday, the 10 year TSY note is experiencing profit taking following a stale overnight trading session and better than expected jobless claims data. "Rate sheet influential" MBS are seeing similar behavior.

A general lack of liquidity combined with follow through selling has led production MBS coupon prices to the lows of the day.The potential for reprices is rising....

I wouldn't panic just yet though. The range should contain further selling.