At 3:11pm, Al-Jazeera reported the Israeli Army launched a large-scale ground, air, and sea offensive on the Gaza Strip. It took bond markets several minutes to figure out what was going on (stocks even longer), but as the story came into clearer focus, both sides of the market took off (stocks and bond yields lower). Israel's Prime Minister released an official statement confirming the ground offensive.
The rally carried 10yr yields through the important 2.47% level. Although Treasuries technically mark the end of their trading day at 3pm, this is one of those cases where we could justifiably wonder if the market activity wouldn't have been the same if the headline came out before 3pm. In other words, 10yr yields officially closed above 2.47, but the move into the 2.45-2.46's isn't inconsequential.
MBS have done their best to keep pace with the Treasury rally, but as is always the case with geopolitical risk rallies, Treasuries outperform. Still, MBS are up 12 ticks on the day now at 102-15. Positive reprices are incrementally more possible than they were at the last update.
The one glaring caveat for all this is that as soon as there's a turning point in geopolitical risk, the turning point in bond markets can be swift.