Equities markets have largely been friendly for bonds today, but a big double bounce on the lows in the SP right before and after the 3pm Treasury market close has bond markets looking a bit frazzled. SP futures are up a quick 5 points and 10yr yields are up about 1.5 bps in the same time frame. Thus far, MBS have only shed 2-3 ticks in Fannie 3.5’s from 104-19 / 104-20 to 104-17 currently.
After the initial scoot higher, 10yr yields aren’t immediately bouncing lower, though MBS saw solid bid-side support at 104-16–same as this morning just before 11am. For all but the jumpiest of lenders and/or most sensitive situations, we’d probably keep the “time to think about locking” line in the sand at 104-16, as it has been since the first update this morning, but it’s not out of the realm of possibility that one of the traditionally early-to-act lenders would justify a small negative reprice on such a move. Best bet, keep using 104-16 as a line in the sand, and adjust accordingly based on what you know about the lender in question.