Low volume...  Low volatility...  Low expectations...  Low pulse...

Seems like some the "mood" that could be inferred from the lead-in wouldn't be indicating MBS prices' flirtation with 3 month highs...  But alas, the charts at least, are pleasant to look at:

But a closer look at the context of this "pretty picture," though not intended to sap morale, at least serves to prevent complacency going forward. What's the context?  In a nutshell: low volume.  Things aren't appalling low in MBS, but tsy's are struggling to hit 80% of the already horrible summertime flows.  Basically, we got our big pop when tsy futures broke 118 last week. 

Since then however, things have not been so hot...

Oh I'm sorry...  You were trying to determine which of those is the "big pop" I referenced?  None of them actually...   The big pop was on the 27th... You might barely be able to see the volume from the above chart once we zoom out in the following chart...

The point?  We have fed minutes in an hour, followed by several items in the coming days that threaten to reconnect fundamentals to price movements.  These are biggies too...  Probably the most significant "event," if you want to call it that, will be the passing of labor day that marks the theoretical end of many summertime market maladies.  Of course there's NFP coming up Friday, not to mention Class A settlement the following week.  Getting to the highs of summer is one thing, getting back into pre-summer price ranges is far from given.

That said, things look to be positive this afternoon.  Enjoy!  And be on the look out for reprices for the better.