Even after moving across the 3pm close of Treasury Pit trading at the CME, bond markets have continued to hold inside the same narrow, sideways range that has contained all the day's trading.  In the case of MBS, prices have been in the same range since 11am yesterday! 

The best levels of the day were seen right at the start with the most pronounced bit of weakness coinciding with the most pronounced rally in stocks.  As soon as stocks turned the corner at 11:20am, it was lights out for bond market drama, and they have been on cruise control ever since.

As was the case yesterday, there was essentially no impact from the morning's economic data.  Producer Prices were higher than expected and Consumer Sentiment was stronger than expected.  Both of those reports would be negative for bond markets, all things being equal, yet here we are in positive territory with few places to look for blame beyond stock market weakness. 

How long will this continue to be the case?  First of all, without more frenzied selling in stocks, bond markets are already starting to push back, in that they're less willing to move lower at the same pace as stocks.  For instance, note the slight move higher in yield in bond markets from 8am to 3pm while stocks are at new lows.

2014-4-11 stocks and bonds

That raises a question as to the level of selling that would be required in equities to really force the hand of bond markets that are increasingly meeting technical resistance.  It's impossible to know exactly how that would turn out, but there is more room to rally at this point.  As 10yr yields attempt to go below 2.60, it gets increasingly difficult without justification from stronger economic data.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
97-12 : +0-07
FNMA 3.5
101-14 : +0-05
FNMA 4.0
104-21 : +0-03
2 YR
0.3550 : +0.0040
10 YR
2.6193 : -0.0087
30 YR
3.4793 : -0.0237
Pricing as of 4/11/14 3:22PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:24PM  :  Reprice Risk on Hold Along with Stock Rally
10:59AM  :  ALERT ISSUED: Treasuries Turn Negative, MBS Near Lows as Stocks Rally
10:02AM  :  Consumer Sentiment Stronger Than Expected; Limited Reaction so Far
9:16AM  :  Stronger Overnight, but Sideways After PPI; Waiting for Stocks' Next Move

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Christopher Stevens  :  "Wells and Chase did $53 billion in originations Q1, down 68% from a yr ago and 28% from Q4. Thinking maybe just maybe the credit box will start to get a little bigger soon."
Andy Pada, Jr.  :  "If rates continue to stay low, Wells and Chase need to push for an expansion of HARP."
Christopher Stevens  :  "not quite sure HARP will right that ship"
Sung Kim  :  "but they are subject to F&F and F&F, so it cant get that big, and then we have the 3% stuff so even if they allow lower FICOs, the rates and points will kill the deal"
Andy Pada, Jr.  :  "HARP allows them to right their originations ship with no additional risk to them."
Christopher Stevens  :  "Jamie Dimon on tight mortgage lending: "it's not getting worse. It's just sitting there and holding back a little bit the purchase market.""
Andy Pada, Jr.  :  "if he said it was getting worse, their stock would be down even more. He gave an answer that basically says that residential lending sucks."