First of all, the overriding caveat for today and probably for tomorrow as well is the low volume.  Normally, low volume is seen at 60-90% of recent averages, but today it's closer to 35-40% of the 30 day average.  Despite a healthy amount of data on tomorrow's economic calendar, we have a SIFMA recommended early close at 2pm, meaning that whatever volume we see will be almost exclusively a morning affair. 

This means a few things.  Of course when volume is low, it takes fewer trades to move prices, which can contribute to volatility.  Additionally, when a significant amount of market participants are not participating, we're left to wonder whether or not the changes we do see are representative of where they will be when volume picks back up either in the week after Christmas or more probably in the new year.  Bottom line is that the actual changes in MBS levels in the short term are taken with that grain of salt.  We'll let you know if something about that assessment changes.

As for today, despite the low volume, the movements were fairly regular and technically sound through 2pm.  After breaking a triangle in the early afternoon (blue lines), 10yr yields continued to ride a tight range within a trend channel aimed at higher yields.  The breakout coincided with 4.5's falling to 102-00, right on the leading edge of reprice risk.  Some lenders did reprice for the worse, but by the end of the day, MBS prices rallied in constrast to the higher/sideways treasury yields, and many of the lenders who repriced for the worse (and even some who didn't) gave small token reprices for the better.

As mentioned, there's no lack of data tomorrow, despite the expected lack of volume. 

830 AM -Personal Spending and Income, Durable Goods,  Jobless Claims

955 AM - Consumer Sentiment

1000 AM - New Home Sales