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Just to remind us who's boss, markets are no longer 'pleasantly flat,' as volume and selling pressure spiked minutes BEFORE the Chicago PMI report that we thought might provide a challenge to the morning's supportive ceilings in 10yr yields and floor in MBS. We'd like to think (as would the SEC), that the much stronger than expected Chicago PMI numbers didn't have anything to do with the initial spike (how could they, right? unless word got out a few minutes early... Just sayin... the volume pop in 10yr futures was something other than simple momentum building in response to a morning stock rally).

Whatever the case, MBS swung 2 ticks lower fairly quickly and 10's hit 1.9975, where they currently threaten to ratchet higher yet again. Heading in the wrong direction so far...

More from MND:

• MBS Commentary: MBS RECAP: Apocalyptic Catalogue of Reprice Alerts
• Mortgage Rate Watch: Mortgage Rates Annihilated; Brief History of All-Time Lows
• MBS Commentary: MBS SPECIAL ALERT: Bernanke Confirms Stabled Stallion
• MBS Commentary: Differences Between Past and Current FOMC Statements
• MBS Commentary: MBS MID-DAY: Yesterday's Gains Erased Ahead of Fed

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