The S&P index has moved up 3 points in the past 10 minutes, although Treasuries are remaining relatively steady. There is a bit of upward pressure seen on 10yr yields so far, but it has only taken them up to 3.052. FNCL 4.5's are similarly unphased, up 4 ticks on the day at 103-28.

FNCL 4.5's are up 5 ticks on the day now to 103-28, breaking through the high's that had previously capped them at 103-27. Not an exceedingly significant break. Just some short term "good news." MBS remain on the dividing line between the period of time in late 2010 that saw the best prices ever and, well, whatever "now" turns out to be. That 2010 range runs from roughly the high 103's to the higher 105's. The pivot-like line in the sand between "then" and "now" is obvious, and the unwillingness to move casually through those levels speaks to the underlying shifts in production MBS coupons that occurred then, yet remains elusive now. 10yr notes also broke their short term resistance, currently at 3.0461. Volume is too low to read much into the technical break, though odds of reprices for the better have increased slightly.

WASHINGTON – U.S. Housing and Urban Development Secretary Shaun Donovan today announced Green Refinance Plus, a program between HUD’s Federal Housing Administration (FHA) and Fannie Mae to allow owners of existing affordable rental housing properties to refinance into new mortgages that include funding for energy- and water-saving upgrades, along with other needed property renovations. Under the program, FHA and Fannie Mae will share the risk on loans to refinance existing rent-restricted projects while permitting owners to borrow additional funds to make energy-saving improvements to their properties. Donovan and Fannie Mae’s Executive Vice President for Multifamily Business Ken Bacon unveiled the program at a senior housing development in the San Francisco Bay Area where HUD is investing in energy-saving green retrofits. “All across the country, owners of affordable housing properties are looking for a way to refinance their mortgages and to make energy improvements and other needed renovations at the same time,” said Donovan. “This program kills two birds with one stone – it preserves our affordable rental stock and it helps finance upgrades that will save energy and money over the long haul. We must make the smart investments in a more energy independent economy. These investments will strengthen our economy, create the new industries and new jobs of the future and reduce our dependence on an ever fluctuating oil market. ”

(Reuters) - Investors are the most bearish they have been since last year's third quarter, cutting their exposure to stocks in May for the fourth month in a row, Reuters polls showed on Tuesday. Concerns about a slowing global economy and nagging worries about Greek and other peripheral euro zone debt also prompted investors to move into bonds and cash. Surveys of 58 leading investment houses in the United States, Europe ex-UK, Japan and Britain showed global equity holdings at their lowest since August last year. Bonds and cash were at their highest since September. "Greece's debt problem and a slowdown in the U.S. economy are increasing uncertainty in financial markets globally," said Yoshinori Nagano, a senior strategist at Daiwa Asset Management. Specifically, equity holdings in an average mixed portfolio dropped to 50.7 percent, the lowest since August, from 51.3 percent in April. There has been a steady drop every month since January. Bond holdings rose to 35.5 percent from 34.6 percent, and cash, where investors tend to go when becoming cautious, rose to 5.2 percent from 5.1 percent. Investors have been made wary by signs of sluggishness in the U.S. economy with high petrol prices crimping consumer spending and bad weather helping to push pending home sales to a seven-month low in April among other factors. There is also some positioning ahead of the U.S. Federal Reserve's ending of its asset-buying quantitative easing program.

As the S&P Index fell to and bounced at it's lowest levels of the day, so too have many yields in the bond market. 10yr notes made it just past their previous resistance level at 3.055, but have since bounced back just slightly to the upside. FNCL 4.5 MBS are near their best levels of the day at 103-27 and both markets are cutting a fairly narrow trading range since the last economic data of the morning spurred a short, but steep rally just after 10am. One reprice for the better has been reported, but we're still not at levels that would make that a widespread occurrence.

MBS are only up 3 ticks on the day, yet reprices for the better are becoming a possibility the longer we hold current levels. This isn't likely to be a widespread phenomenon, but for lenders pricing conservatively, and near this morning's low MBS marks, it's only a matter of time spent holding the highs of the day before a token or two is coaxed out of the worst rate sheets. Looking at 10yr notes by way of a benchmark for the general ocean of sentiment in which MBS swim, we get the overwhelming sense of "range reinforcement." What does that mean? 10yr yields carved out a new, lower notch in their range on Thursday and Friday with support bounces (ceiling) seen around 3.095 and resistance bounces (floor) seen around 3.055. Simply put, so far this morning, yields have see resistance and support bounces at the same levels, thus reinforcing this recent range. Although MBS hasn't made it back to their Friday highs in the same way 10yr yields made it back to Friday lows, FNCL 4.5's are still 3 ticks up on the day at 103-26. 10yr yields are at 3.0607 currently, and like MBS, haven't moved far from their best levels of the day. In the intermediate term, this 4 bp range in benchmark 10's is too narrow to be maintained for long. If it doesn't see a significant break before NFP, it's all but guaranteed after the report hits at 830am this Friday morning.