Not much green on my trading screens today, unless you look at yields and volatility, those are up! Otherwise the only other thing rallying is a herd of angry fencesitters who've been patiently waiting for QEII to kick in and mortgage rates to rally back down to record lows.

Stocks, bonds, and commodities are in the john.

In our market, the 10yr note briefly broke long standing 2.75% range support, led by selling in the futures market. This is about the same spot where bargain buying was able to overcome short selling/position squaring on Wednesday. The 10 yr note is currently -24/32 at 99-01 yielding 2.735%. 5s are -19/32 at 99-19 yielding 1.337%. 7s are -29/32 at 99-11 yielding 1.974%. 

We need 2.75% to hold in 10s. Hang in there....

Rate sheet influential MBS prices are poking and prodding at long standing range resistance as well. The December FNCL 3.5 is -17/32 at 99-04 and the FNCL 4.0 is -14/32 at 101-30. Yield spreads are tighter on the spot but vol is up more than a few norms today so valuation views will vary.

All things considered, lenders weren't too rough with rate sheets this morning. I show the majors 9.9bps worse on average vs. loan pricing on Wednesday. One of the majors actually improved on first released this morning. The loan pricing pain can be seen in the week over week comparison though. Rebate is 67.3bps lighter on average than it was last Friday.

Unfortunately the relative stability won't last. Lenders will probably recall rate sheets.

The S&P is -1.38%.  Light crude is -3.54%. Gold is -3.15%. Silver is down 6.56%. Soy is -5.17%.


The range hasn't played us but we're definiitely testing its resilency.