FNCL 4.5's have added another tick, now up to 100-30. Volatility remains low. 10yr notes are at 3.648 after getting as low as 3.640. Reprice risk is minimal and if anything, a lender who hasn't repriced at all yet today is more likely to reprice for the better than for the worse.

at 3.646, 10yr yields hit the 3pm official close within 1 bp of their opening levels. Volume has been on the decline and volatility is low. FNCL 4.5's continue to operate near their highs, currently at 100-28. A few more reprices for the better have been seen.

at 3.648, 10yr yields hit the 3pm official close within 1 bp of opening levels. MBS continue to cut a narrow path near their highs of the day. FNCL 4.5's are currently at 100-28. Reprices for the better have been seen from a few more lenders. Things are fairly quiet.

In an interview on Dallas radio's KERA , FRB Dallas President Richard Fisher (voter, hawk) said he will not vote for any further quantitative easing once the Fed's current $600 billion Treasury buying program expires at the end of June. That's a departure from his stance at the January 24-25 FOMC meeting where neither he nor FRB Philadelphia Fed President Plosser dissented. It could be that Fisher's outlook is better than his current assessment, but it would not have hurt to have him or Plosser pick up the baton from dissenting hawk Hoenig whose voting rights expired at the end of 2010. (Source: Reuters)

At 3.656, 10yr yields are at their lowest levels of the day. The low volatility environment has allowed FNCL 4.5's to hold incredibly steady at their recent highs and add 1 tick, now at 100-28. A few more lenders have repriced for the better, but not by much.

As treasury yields were riding this morning during the 9am hour, what little volume existed rose to bring the 10yr yield back toward 3.67. This has been the center of today's range and is also the current yield. MBS are about half a tick better at 100-27+ on the FNCL 4.5. We've received one report of a lender actually repricing for the better and indeed the longer we continue to operate at these levels and without volatility, it's possible more will follow suit.

10yr yields are at 3.674 which is about the middle of their range today and follows a series of successive lower highs and high lows (think triangle / narrowing range). In stocks, the S&P has sort of leveled off around 1321 and MBS are a few ticks off their lows, back up at 100-27. Though this is still a few ticks off the earlier 100-29 highs, these are the best levels for MBS since before 10am. Reprice risk is reduced.

Loan pricing is 14.7bps worse on average among the five major lenders this morning. The largest rebate reductions are seen in the note rates used to fill 4.0 and 4.5 MBS trades (4.375 to 5.00%). On Friday, C30 "Best Execution" loan pricing was split between 5.00% and 5.125%. With MBS prices lower by another 8/32 today, new rate sheets reflect a firm shift in "Best Execution" up to 5.125% with some lenders moving as high as 5.25% where rebate is much fuller.

FNCL 4.5's have fallen back to their lows of the day, this time 1 tick lower at 100-21. This makes it possible that some lenders may consider repricing for the worse. 10yr note yields are near their weakest levels as well, currently at 3.682. Stocks are having a good day with the S&P up over 10 pts at 1321.20. Current levels in the bond market being still roughly in line with the lows, the risk of reprices for the worse would be their highest if things weaken further from here.

The 3.666 pivot in treasuries is continuing to provide resistance to the 10yr yield. MBS are slightly improved from previous lows, now at 100-22. Risks of reprices for the worse have diminished but we remain defensive of a break below the 3.666 pivot in 10's