MBS dictate mortgage rates, but Treasuries almost always provide better technical cues, and we probably just got one.
10's had been doing a fine job of holding on to a ceiling at 1.921, hit just after Consumer Sentiment, and with pretty good volume. We drifted sideways from there and stood at 1.917 at 11:30am. MBS were still holding 102-26 at that time.
Over the course of the next 5 minutes, selling pressure looked like it was picking up and when 10's hit 1.921, they popped quickly higher. Though the move was small, it seemed potentially technically significant--at least enough to issue the previous alert. We're now up over 1.935.
Unless MBS are leading a move, they tend to lag the quicker technical moves in Treasuries or Treasury futures, and this was the case just now, though they didn't wait long. At 102-22 on the day, MBS are now down 13 ticks, and the last four of those followed quickly after the Treasury pop. Such a "pop" is what we were afraid of at 11:35 when the alert came out with MBS still at 102-26, hence the quick, 1 sentence alert (those aren't common).
In the time it took to type the last two sentences, we're down another tick to 102-21 now, and it looks like we have further to fall before bouncing. Reprice risk is about as high as it gets. If you haven't seen one yet, you probably will.