From yesterday's 5pm going out marks at 101-29, FNCL 4.5's fell as low as 101-18 this morning. But after two decent showings of support, theyv'e gained back more than half of that lost ground and currently sit at 101-25. 

It's possible that the "itchy trigger finger" lenders out there are considering repricing for the better as a result, but we'd suggest a broader reprice for the better target at 101-28.

As you can see in the chart above, the major support for MBS was seen right along the lower end of their recent trend channel.  But as you know, Treasuries lend themselves more readily to technical analysis, so let's see what's going on there....

It seems clear that a support zone is being inferred from last week's highs, just over 3.49%.

Helping this bounce materialize today is a weaker stock market....

The stock lever has been fairly connected today as anticipated and with the S&P now down over 10 pts after being positive in early trading, bonds are getting a lift.  But as we can see in the chart below, broader rally resistance has been established at 3.40% with 3.42% serving as a profit taking threshold.  

Looking closer at the chart. Take the high yield levels from January and connect them.  Then, do the same with low yields.  Not only does this show a perfectly parallel and ever-so-slightly bullish trading range was in effect in January, but it also shows us that yields may be encountering resistance here as well, effectively being denied from re-entry into that previously bullish trend channel.  We've said it before and we'll say it again, it's going to take something more than we've already seen to get rates comfortably back in that channel.

Plain and Simple: The S&P just printed a new intraday low and benchmark interest rates are benefiting from it. Unfortunately we have yet to hear a convincing enough argument that would warrant a short-term move through strong 10-yr TSY note resistance at 3.40%. The FNCL 4.5 is still in negative price change territory but is just below the intraday high price of 101-25. If the FNCL 4.5 touches 101-28 lenders will be more willing to reprice for the better