The April Philly Fed data was stronger than expected with the headline coming in at 16.6 vs a 10.0 consensus and 9.0 reading in March. The only mitigating factor was a weaker 6-month outlook (26.6 vs 35.4 previously). Other than that, all the key components advanced, including the important employment index (6.9 vs 1.7 previously).
Bond markets hesitated at first, but have now moved to the weakest levels of the day. If there's a silver lining, it's that they haven't yet broken past the weakest levels from earlier this morning--merely matched them.
That leaves 10yr yields at 2.664 and Fannie 4.0s at 104-09, down 6 ticks on the day. Some lenders are looking at an eighth of a point of weakness since releasing this morning's rate sheets, putting them in a position to consider a negative reprice (though those considerations become more serious and broad-based if we lose a few more ticks).
Until and unless we do see a break to weaker levels, this is a refreshing amount of resilience in a situation that would typically elicit a bigger movement.