• Whereas the 10yr note lost a full point in price, and backed up in yield 12 bps,
  • MBS 4.5's were down only 5 ticks to 101-09
  • The soon to be "in the spotlight" June coupons lost 6 ticks and ended right on 100-28.  No coincidence?
  • Stocks went on a tear, but remained in a bearish trend overall.
  • Auctions coming up tomorrow.  Uncertainty and Risk pick back up.

Like AQ said, "rates await confirmation of shift in sentiment."  The simple fact that stocks rallied big and treasuries sold similarly does not necessarily mean that "low rates" are heading higher due to the earlier news about the Greek bailout. It's a bit of a sticky situation though...

If we're "playing the range until the range plays us," we actually held fairly well within recent bullish trends for bonds.  The selling today merely brought us back in line with those averages.  It's perfectly possible for these low rates to persist, but at this point probably equally possible that the "unwinding of sovereign drama," or at least of a part of it, will bring an end to the recent bullish trend and moderate the range.  It promises to be one of those "wait and see" weeks where we see where treasury auctions land, how the world's faith in a solution for Greece holds up, how stocks perform, and how bonds react to that.

There's plenty more to consider, but overall, we just weathered a big, and mostly beneficial storm.  The sideways action evident in the charts below is a good prologue to a bit of indecision, consolidation, and "falling knife watching."  The more minutes and hours we put between us and making decisions, the better informed they will be.  With prices and rates still at or near their best levels of the year, locking is harder to argue against than floating.  But we wouldn't give up hope for gains just yet. 

The rest of the comments are in the charts. 

To whatever extent the stock lever comes into play this week, the more of these "ceilings" that the S&P takes out, the worse the implication for treasuries.  From there, we'll have to assess how well MBS are wanting to keep pace with treasuries.  After last week and today, the analogousness of treasuries and MBS may be tenuous until further notice.