MBS MID-DAY: Quietly Consolidating Ahead of FOMC Minutes

On the whole, it's been a quiet day for bond markets, with the assumption being that volatility will increase after the 2pm release of the FOMC Minutes.  The other possibility is that domestic volatility has been very light compared to European volatility over the past 3 weeks, and that we'd need to see a sustained move in Europe before reading too much into what might seem like big intraday swings (more on this HERE).

The day began well, with Treasuries holding technical support at 2.28 overnight and moving into moderately positive territory by the open.  MBS also opened roughly 5/32nds higher.  An in-range move to slightly weaker territory resulted in a modest swell of negative reprice risk heading into 10am, but this has since been revealed to be just another step in the consolidative move heading into 2pm.  At this point, bonds have ground to a complete sideways halt with essentially no movement for the past 40 minutes.