Here we are nearing the 3pm marking and treasuries are backing up yet again in the long end while MBS flex their "tightening muscles."  Or in english: 10yr tsy's are 16 ticks lower in price and up over 5 basis points in yield.  2 and 3yr tsy's, however, are unchanged to only slightly higher in yield.  But even as treasuries are getting crushed (at least in the long end), MBS are holding their ground remarkably well, indicating that spreads of MBS yields to Tsy yields are "tightening."

Fannie 4.5's are only down 2 ticks at the moment at 100-30.  Despite that strength, there is the whole matter of that "whipsaw volatility."  The moves are fairly abrupt and fairly frequent, but keep in mind this is occurring within a 6 tick range at worst, and averaging a 4 tick range.  That's nothing like the swings we grew accustomed to during volatile days in 2009.  Almost yawn-worthy, but because the volatility introduces the possibility of reprices for the worse, we'll save the yawning for later in the day.

Remember too, our discussion about "treasuries as the benchmark" and "mbs as the spread product?"  In that sense, what's bad for the benchmark ultimately has a bad indication for MBS, at least to some extent.  Then again, it may sound cliche or like an oversimplification, but there really can't be any meaningful conclusions drawn about the road ahead until NFP Friday.