All we really know about the "busy"-ness of next week is that the calendar is fairly well occupied. It's not certain that we'll see a level of volume justified by the goings on. Although Monday is quiet, the next 4 days of the week will contain Durable Goods, GDP, 3 TSY Note auctions, as well has PCE and Sentiment crammed together with Pending Home sales on a half-day Friday. Bond Markets shut down at 2pm for Memorial Day on the following Monday. That extended weekend is one of the dark horses in deciding how the econ calendar might translate to volume next week.

Highs are getting lower and lows are getting higher for both MBS and TSYs as the weekend gets closer. FNCL 4.5's are in the middle of their range currently up 2 ticks at 103-12. 10yr notes are down just over a bp and a half at 3.1562. This relative stability and strength in bonds has persisted despite stocks continuing to hover near their highs of the day. Almost a million 10 yr contracts have changed hands, about 2/3rds of yesterday's volume, and not much more is expected.

10yr yields ticked momentarily over 3.18 and are back now to 3.17 as the stock rally that had been pressuring bond markets failed to break through opening highs (around 1340.85 in S&P). Although TSYs and MBS are still not back in their best range of the day, they've moderated enough to allay the fears of any immediate reprice for the worse. FNCL 4.5's are up 2 ticks on the day at 103-12.

FNCL 4.5's just ticked into the red, down 1/32nd to 103-10. 10yr notes just turned negative as well, about a 3rd of a bp higher at 3.176. The culprit is noticeably the stock market. So far today, stocks make a move, bonds follow moments later. As the S&P surges ("relative surge".... they're still negative) toward 1340 from the 1332 lows, this could be the first sign that TSYs and their dependent spread products like MBS are in trouble. Consider this early warning for reprices for the worse. Any lender that reprices now would be early to the game. We're alerting you to let you know that we're heading in the direction of reprices for the worse if stocks continue gaining and bond markets weaken any further.