After making a decent attempt at bouncing off earlier lows around 102-13, Fannie 3.5 MBS are once again under pressure.

Unlike yesterday, MBS have been able to tighten admirably today vs Treasuries, but weakness in Treasuries is getting to a point where MBS may soon be forced into weaker territory. That situation is outlined in greater detail in the following MBS Commentary post and includes plenty of charts for perspective.

The 1.90 level mentioned in the post is currently being heavily tested! If it breaks significantly (we're not as worried about 1.905 as say, 1.91+ for instance), MBS could find themselves at new lows of the day and at greater risk of a reprice for the worse. Even with current weakness, there's already a small risk of negative reprices from a lender or two.