With respect to the previously discussed trend channel, 10yr note yields are at the lower end of that range at 3.3926. This rangebound behavior has not been enough to motivate MBS higher as FNCL 4.5's continue at 102-04 and have been range-bound within 2 ticks of that level all morning.

3.4319 and 3.3946 (call it 3.43 to 3.40) mark a range that has contained 10yr notes so far this morning. FNCL 4.5's continue to favor the frequently visited 102-04 price level. The yield highs in 10's this morning at 3.43 in correspondence with the lows at 3.40 line up with highs and lows from the 21st to form a trend channel DOWN in yield. Yields would have to get solidly into the 3.42's to break this channel on the upside and into the middle of the 3.3's to break it bullishly. 3.40 is important resistance to improvement.

Benchmark 10's along with the rest of the yield curve have been on the rally path since 8:50, with 10yr yields now ticking into the 3.39's. 30yr bonds are performing best as the overall shape of the curve is flatter this morning. As you notice a price gain in 30's that seems relatively high versus gains across the curve, keep in mind that it takes more movement in PRICE on 30yr bonds to effect changes in yield versus the shorter end of the curve. In other words, with the 30yr up 14 ticks in price currently, vs. the 10yr up only 3 ticks, the change in respective yields is 2.5 bps versus about 1 bp in 10s. With 2yr notes UP 1bp, that makes the gains in the 30yr more understandable in terms of flattening and yield changes. MBS have benefited marginally from the rally, with 4.5 FNCL's up to 102-06, breakeven on the day

MBS FNCL 4.5's are trading between 102-03 and 102-06 so far this morning, currently on the lower end of that range. 10yr treasuries came into the domestic session at 3.41 and have since climbed to 3.426 though seem to have encountered a bit of support there. There is no scheduled economic data on today's calendar.