Treasuries in the long end and MBS are both down after rallying into yesterday afternoon.  The stock lever is contributing to some FI pressure as the yield curve undergoes some corrective steepening up over 248 bps.  MBS 4.0's are down 5 ticks at 100-10, and 4.5's are down 5 ticks to 102-16.  Despite 2 and 3 yr ntoes being a tick better today, the 10yr is down 12 ticks bringing the yield "all the way up" to 3.238.  (short end yields lower vs. long end higher = steepening).

The phrase "all the up to" is used to tacitly imply that things could be a lot worse on most other days where 10's are down 11 ticks...  The obvious motivation for such thoughts would be the actual levels of tsy yields and MBS prices.  The former is as low as it's been for some time in the 10yr, and the latter is still trading within 2 ticks of the previous all time high.  Not so bad indeed.

More subtle is the emerging sense that, as the week progresses, the range-trade continues to play an important role.  None of this AM's data was deviant enough to cause an organic price movement outside the range, and all 3 markets are in a reasonable level of agreement.

The range is clearer still in Stocks

And in a more related market, the 10yr tsy has also clearly done the "range thing" over the past two days.

So should astro be worried about the recent break?  No, not yet.  Remember: no organic reason to break the range.  So until one emerges or unless I wasn't smart enough to identify a more important short term range, we'd watch and wait for further evidence of the range.  But keep in mind that last night's close raised the distinct possibility that the more significant stop on the long term range may be indicated at the popular 3.3 area due to volume.

Even so, it's CONCEIVABLE  that a lender who priced early might be spooked by this test of the 10yr and read MBS indications into that, thus prompting a small reprice from the worse.  But we go Vizzini from Princess Bride standing by in case we need to lament broader risk of reprices for the worse.  Money or timeless comedy...  Can't lose either way...