Trading so far this morning is doing its best to appease two considerations. On the one hand, there's the fact that "something" happened with respect to the Greek bailout vote. On the other hand, "something" has happened with respect to Greek bailout votes in the past, yet we ended up back in the same can-kicking position. Markets are indeed skeptical about any sort of "solution" that comes from EU bailouts/negotiations/summits/meetings and now, conference calls! That much is evident in the support seen around 2.04 in 10yr yields.

But the sideways grind is accompanied by heavy volume today, which brings us to what's really on the table: a chance to hold our ground, or a change to shift higher in yield (lower in terms of MBS Prices) past some significant pivot points. 10yr yields, while not higher than 2/09, are still on the verge of breaking out of their long term trend-channel, which passes through 2.034 today. (Of course, they're currently higher than that, but it would take more than an intraday break to confirm). Current levels between 2.04 and 2.05 are also right on the the 50% retrace between the highs and the lows since August 2011. Just slightly higher it the 100 day moving average, which 10's haven't broken during the same time, but have tested on several occasions.

Long story short, testing of these technical trends + the thick volume suggests markets are essentially "deciding" how they feel about Greek bailout 2.0. MBS are holding up fairly well so far this morning, but will have to follow Treasuries to some extent if bigger shifts happen. That likely means a break below 103-00, but we'll cross that bridge when and if we come to it. For now, 103-06 means Fannie 3.5's are still holding the lower end of their long term trend channel.

(Reuters) - Euro zone finance ministers sealed a 130-billion-euro ($172 billion) bailout for Greece Tuesday to avert a chaotic default in March after persuading private bondholders to take greater losses and Athens to commit to deep cuts.

After 13 hours of talks, ministers finalized measures to cut Greece's debt to 120.5 percent of gross domestic product by 2020, a fraction above the target, to secure its second rescue in less than two years and meet a bond repayment next month.

By agreeing that the European Central Bank would distribute its profits from bond buying and private bondholders would take more losses, the ministers reduced the debt to a point that should secure funding from the International Monetary Fund and help shore up the 17-country currency bloc.

But the austerity measures wrought from Greece are widely unpopular among the population and may hold difficulties for a country which is due to hold an election in April. Further protests could test politicians' commitment to cuts to wages, pensions and jobs.