MBS RECAP: Slightly Weaker Again, but Still In The Range

For a second day, bond markets gave up a modest amount of ground.  To put the losses in context, yields are heading out at 1.91 in 10yr Treasuries.  That's right in line with Friday's highs and still well inside the narrowest version of the current sideways range.  In other words, this is a "sideways' sideways market." 

There were no economic reports today and no headlines that stood out as market movers.  If anything, European markets set the tone for the day as German Bunds finally moved up from their technical bounce by mid-day in the US.  Conveniently, we discussed that possibility before it happened.  Here's an updated view after today's trading:

The best analysis, however, is that nothing is going on.  Sure, Bunds moved higher, and that may indeed have put some slight pressure on US bond markets, but trading levels have been so range-bound overall that it doesn't make sense to read anything into it beyond what we've already discussed (i.e. bonds having a hard time moving past resistance levels, which will be a cause for concern if they break support levels).