A bit of pressure this afternoon on bond markets as stocks break higher from previous resistance. Volume is low all around and 10’s/MBS initially gave a bit of chase to the stock breakout, but seem to be finding their footing.
For 10’s that’s just under 1.63 and for MBS, closer to the lows of the day–102-17 in Fannie 3.0’s and 105-02 in Fannie 3.5’s. That does introduce some slightly negative reprice risk, but less than the visual on the charts might suggest due to the narrowness of the broader range and the fact that rate sheets were coming out around the lows this morning. Muted risk doesn’t mean non-existent though, so “know thy lender,” and stay tuned for further stock market gains putting additional pressure on bond markets.