It's a bit too early in the day for negative reprices as most lenders are not yet out with rates. Those who are, likely released sheets recently, when current weakness was already in play.

Stocks are surging relentlessly, as are 10yr yields, now up to 2.09. The S&P is as high as it's been since last summer (1320 currently). Despite these cues, MBS are holding up somewhat better with Fannie 3.5's down "only" 5-8 ticks currently (range given due to choppy trading) between 102-16 and 102-13. The first major support level for 10's may already have come into play around 2.10, but it's too soon to say for sure whether or not the earlier bounce at 2.0937 constitutes technical support. We'll keep you posted...

Things were fairly flat for most of the overnight session, and 10yr notes got as low as 1.99's earlier in the morning when the potential inability of Greece to reach workable bond swap deal with private investors and the IIF was center stage. Things changed course a bit when a German official announced that Germany is discussing running the EFSF and ESM simultaneously. This started some downside momentum in bond markets that hasn't really stopped until moments ago when 10's topped out just over 2.06. Fannie 3.5's are down only 3 ticks to 102-19, a well-traveled pivot point for MBS. It's still not clear if the morning weakness has run its course.

There's no major economic reports scheduled, China is out on their New Year holiday, and most eyes are already turned toward the FOMC over the next two days. All those things being the case, volatility should be noticeably higher between now and then.