Both benchmark Treasuries and "rate sheet influential" MBS coupons fared well today, albeit in light volume but that is neither here nor there if you are a loan originator because REPRICES FOR THE BETTER were reported, sometimes more than once.

Heading out the door "rate sheet influential" MBS prices are trading at intraday highs. While I am reluctant to award this highly regarded status to a year end trading session, I will do so simply to spread some holiday cheer...TODAY WAS A FACEMELTER.

The FN 4.0 is +0-27 at 98-30 yielding 4.106% and the FN 4.5 is +0-20 at 101-18 yielding 4.341%. The secondary market current coupon is 4.247%. The current coupon yield is 77bps higher than the 10yr TSY yield and 63bps over the mid-market 10yr swap rate.

Yep. That's a facemelter.

10s are going out up a full point!  Currently +1-00 at 99-04 yielding 3.478%.

Yes the all important 3.50 pivot has been busted and we have re-entered the range. This is partly due to the real money/black box battle which I described this morning , besides that its safe to say that the stock lever has been quite influential over the TSY market today. 

Stocks sold, the dollar rallied, and gold moved cheaper....wanna know why?

I would say it is largely a factor of year end profit taking. Long stocks, short the dollar, long gold has been a favored trade by MANY this year. Because this is essentially the last trading day of the year, in the mind's of most money at least,  those profitable positions are being closed out before all liquidity dries up in the marketplace...aka "position squaring".

Enjoy the reprices for the better.

I am off to help my nephew with polygons!!