What a day! A better-than-expected Non-Farm-Payrolls print giving way to a bond market rally with MBS at their highest levels in over 3 months--who'd have guessed... Unfortunately, the positivity is more constrained to the charts as opposed to rate sheets, though we've seen our fair share of positive reprices on the day. Things have died down a bit in MBS now, but were still going strong when the video below was snapped from the MBS Live Dashboard:
That trend was broken just before the 3pm marks, but sideways support kicked in at 103-03, making for closing MBS marks distinctly above the long term trend channel seen below. The only spike above this channel is the one we continue to view as an exceptional knee-jerk reaction to Operation Twist.
Treasuries rallied too, but didn't make it past yesterday's lows. Volume obviously spiked near the NFP release, but died down fairly quickly and is mostly dead at the moment. Stocks ended up fairly flat in relation to yesterday's afternoon range.
But in the longer term, stocks could be contending with some pretty serious overhead resistance (well, they ARE contending with it, but whether or not they bounce lower or break through remains to be seen. You know... That whole "domestic economic strength" vs. "European Drama" thing).
Meanwhile, benchmark Treasuries keep pluggin' along in their preferred trend channel, but are starting to show some signs of consolidation/storing-energy for a more pronounced move higher or lower, as well as potential horizontal resistance (not pictured below) at 1.95.