Loan pricing is getting beat up today. MBS prices are moving to new intraday lows. Reprices for the worse are possible. Suntrust already did...

The production side of the coupon stack is underperforming, current coupon yield spreads are 4bps wider to 10s but generally in line with 5s, which are experiencing modest profit taking.

The 5yr note is -10/32 at 100-23 yielding 1.100%. The 10yr note is -13/32 at 100-23 yielding 2.539%. The 2s/10s curve is 1bp steeper at 217 wide. The December FNCL 3.5 is -17/32 at 100-16 and the FNCL 4.0 is -10/32 at 103-05.

Rate sheets were already 20bps worse on average with one of the majors reducing rebate by over 40bps on note rates surrounding par.

The sell off has been orderly so far as indications have managed to migrate directly to key technical pivot points. The current downtrade, which I've illustrated using a Fibonacci Fan, hsa found support at the 50% retracement. This seems like a good stopping point.

Again...nobody panic. This is pretty normal behavior. I'd say we're holding up just fine considering the Employment data that printed this AM. Need I remind that the Fed will be spending $110 billion/month in TSYs? Barring a total loss of Fed credibility, we're playing the range here, locking now would be like selling a stock at the price lows.