Excruciatingly low holiday volumes magnified the existing downtrend today, bringing MBS prices back to the lower-middle of their downwardly-sloped trading range from late October. Viewed in that light (as a range-bound extension of a preexisting trend), there’s no drama and nothing interesting about today.
It’s just a bit of a downer to traverse a good portion of the trading range in one day. In defense of the sell-off, today’s data was pretty unfriendly. This was more of a factor for Durable Goods at 8:30am as far fewer traders remained interested by 10am New Home Sales.