Ever since the brief sell-off that followed this morning’s ISM data, bond markets have done a good job of finding and holding their footing at slightly weaker levels. For Fannie 3.5 MBS, that’s been between the 103-22 support level and 103-24. 10yr yields have been roughly contained by 1.95 and 1.96
As of this moment, 10’s just tested into 1.96 territory for the first time today, painting the “sideways” theme with a few brushstrokes of additional weakness. If it translates to MBS enough to push 3.5’s below 103-22, negative reprice risk would be increasing.