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MBS and Treasuries moved quickly, but moderately into weaker territory following Bloomberg headlines indicating that 'Cyprus Popular Bank' would be shut down and split into good/bad banks. Rather than serve to spook risk markets with a "bank shut-down," the fact that depositors are being quarantined by the split (and assets under €100 bln guaranteed) is seen as a net-positive for EU contagion.

The Euro moved quickly off it's lows with domestic equities and bond markets following. The moves have been moderate so far and MBS remains inside the morning's range with Fannie 3.0s still up 3 ticks at 102-24. 10's are in line with levels from earlier in the morning at 1.9407. No reprice risk on these headlines, but they are serving as a speedbump to further gains for now.

More from MND:

• MBS Commentary: MBS Annihilated After Fed Confirms The Hype
• Mortgage Rate Watch: Why Did Mortgage Rates Skyrocket Past 2013 Highs Today?
• MND NewsWire: Distressed Sales Fall Under 25 Percent in California
• MND NewsWire: House Rejects CFPB Testimony on Qualified Mortgage Rule
• Pipeline Press: Mel Watt Hearings; Current Origination Numbers; Foreclosure Process Slowdown Merely a Hiccup

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