Apart from the mid-day drama surrounding rumors that China was set to buy Italian Bonds, and to a a lesser-extent, Dallas Fed Pres Fisher's reference to Jujitsu in his speech, today was fairly uneventful. Both MBS and Treasuries just sort of leaked weaker at a fairly measured pace. In the after hours session, 10yr yields even bounced off some support around 1.95 which was a high volume mark from Friday morning. Markets are clearly continuing to trade technically amid the uncertainty. Here's a look at the downtrend we've been following in 10yr yields:
As you can see, yields did what they needed to do in order to avoid closing outside the trend for two consecutive days. Things are somewhat similar in stocks, where there have been numerous tests outside the trend, but no confirmed break. You can see how the trend channel in the chart below is in line with where stocks turned the corner today:
And what about our old friend MBS... Not much of a show to see here... We noted the CONCRETE CEILING last week and really, there's no change to that, for either the 4.0 or the 3.5, though we hold out hope it could happen in the future. But it hasn't happened yet: