Bond markets were weaker overnight, further backing away from the geopolitical risk-driven rally that took place yesterday morning.  Stronger Chinese GDP also helped markets move back towards 'risk' (stocks and bond yields higher). 

By the open, 10yr yields and MBS were both almost perfectly back in line with yesterday's weakest levels.  So far, they've gone no higher thanks to a weaker-than-expected reading on Housing Starts. 

• March Housing Starts 946k vs 973k forecast
• February Housing Starts revised to 920k from 907k
• Housing Permits 990k vs 1008k forecast
• singe-family permits and starts rose while multifamily fell

MBS and Treasuries both improved just slightly following the data and are currently at their best levels of the morning.  Stocks are at their weakest levels of the morning--a fact that further helps bond markets in the current environment (where the stock lever has been so well connected).

Ukraine, as a market mover, went from a distant memory yesterday to 'front and center' for most of today.  As global financial markets weigh the prospects of civil war--chiefly the involvement of larger nations like the US and Russia--bond markets have rallied strongly and stocks have sold-off.

Treasuries, which benefit more from such flight-to-safety trading, had already broken below yesterday's low yields.  MBS have now joined them in breaking yesterday's best levels, though they continue to lag overall (which is normal in these cases). 

Still, the incremental improvements make positive reprices incrementally more likely.  We're in a situation now where if you haven't seen a reprice yet, you almost certainly will.  Fannie 4.0s are up a quarter of a point at 104-20 and Fannie 3.5s are up 10/32nds at 101-16.