• 4.5's up 1 tick to 101-04
• 10yr Tsys unchanged at just under 3.62.
• Higher in the MBS stack seeing better gains on Fannie releasing details on 120+ delinquency buyouts.
• light data, light volume, technicals rule the day
• Bonds enjoying best and most stable levels of the day this afternoon.
• Nothing else really happens until tomorrow.
  

MBS 4.5's had spent the morning fighting to break into yesterday's trading range beginning right around 101-00.  This was accomplished just after 12:30 and the gains have held up well this afternoon.  Leading the charge was the yield curve as the 10yr note's first battle was with it's coupon level at 3.625--which is PAR at the moment.  After that, the same 3.615 inflection point discussed yesterday has proven significant again today.

Note on the chart below how 10yr yields shoot down fairly quickly after cracking the 3.625 level, then rise briefly for the customary "test" of the recently broken level before moving down to the next rung on the technical ladder at 3.615.  Pretty much a textbook example of technical movement.

With under 2 hours of trading left, even if these technicals were to break down at this point, it wouldn't mean much unless accompanied by surprise data, volume, or both.  Chances for reprices for the better remain as intact as they've been all day, so if you're waiting for a potential reprice to pull the trigger on something, keep waiting if you haven't seen one yet today.  We'll let you know if things get dicey enough to retract that statement before 5pm.