Equities are globally green and benchmark yields are bouncing back this morning after failing to breach a key resistance level yesterday.

S&P futures are +18.50 (1.39%) at 1,327 and Dow futures are +147 (1.2%) at 12,373 after stocks rallied around the world in the overnight session on upbeat corporate earnings reaction. In China the SHANGHAI closed up 0.27%. In Hong Kong the HANG SENG finished +1.6%. In Japan the NIKKEI went out +1.76%. Stocks are Europe are trading in positive territory. The CAC is +2.45%, the DAX is +2.82%, and the FTSE is+2.29%.

Reuters reports Solid earnings, outlooks boost stock futures: Intel Corp (INTC.O) jumped 5.6 percent to $21.11 in premarket trade after forecasting quarterly revenues well above Wall Street's estimates, easing fears the world's largest chipmaker is struggling as personal computer sales growth wanes. Yahoo Inc (YHOO.O) advanced 4.2 percent to $16.80 after the Internet company said an important partnership with Microsoft Corp (MSFT.O) is taking longer than expected to pay off, but the company posted quarterly earnings that topped Wall Street targets. Diversified manufacturer United Technologies Corp (UTX.N) posted a 16.9 percent rise in quarterly profit and raised its outlook for the year, boosted by strong demand for its Carrier air conditioners. AT&T added 1.6 percent to $30.80 after the Dow component posted its first-quarter results. Apple is expected to report quarterly results tempered by caution over how supply constraints may squeeze margins and restrain iPhone and iPad sales.

Not only are stocks rallying but so are commodities.  June settle NYMEX Light Crude is +1.37% at 109.76 and Gold is treading water near a new all-time high at 1501.70 (+0.44%)

So the risk trade is clearly on and Treasuries are out in the cold because of it....for now at least.

The benchmark 10-year note is -9/32 at 101-28 yielding 3.395%, the 2s/10s curve is 1bp steeper at 272bps wide and 10yr swap spreads are slightly wider as payers shed some duration. I suppose that isn't so bad when considering the size and speed of the above discussed stock rally.  This rates backup comes after 10s failed to break technical resistance at 3.36% yesterday.  A cluster of support is found between 3.40 and 3.42% in 10s. Failure to hold that zone would put us on the defensive (tactically).  It looks like we're gonna find out just how nervous the TSY short-base is at these lower dollar prices. This is either an opportunity to cover at lower dollar prices or add new shorts. Position squaring seems like a better idea ahead of next week's FOMC meeting!Cash looks like the smart spot to be in....

Current coupon MBS are outperforming TSYs and swaps as prices decline and prepay speed assumptions slow. The FNCL 4.5 is -6/32 at 102 the rock. I've got the secondary market current coupon marked at 4.14%. On the spot spread levels: +75bps/10yTSY. +69.6/10yIRS. +203.7bps/5yTSY.  MBS trading has been slow since Class A roll last Monday.  Loan pricing has however been on a winning streak as lenders absorb pockets of weakness to maintain competitiveness. Unfortunately rate sheets will be worse today.

KEY EVENTS IN THE DAY AHEAD...

10:00 - Existing Home Sales are also anticipated to jump in March following a significant downturn in February. Sales of previously-owned homes tumbled 9.6% to an annual pace of 4.88 million in February, breaking a three-month trend in the other direction. Economists forecast a rise to 5 million this time around.

Single-family home sales, the key component in the report, are expected to rise with help from lower prices: median prices were down 5.2% year-over-year in the last report.

Economists at BBVA, while predicting a sales increase in March, say housing market fundamentals are bleak and predict the residential sector will remain so in the first half of the year.