Bond markets have been fairly calm this morning, even if slightly weaker after the ISM Non-Manufacturing data (aka ISM Services). Before that, there has been little activity as the two overseas hubs of overnight Treasury trading--London and Tokyo--were closed for the day. The domestic session got off to a slightly positive start and simply moved into slightly negative territory after the ISM data.
Despite the relative lack of movement in MBS and Treasuries, trading levels are in an important zone. 10yr yields are doing battle with the lower end of their 3-month range, marked by 2.60 on average, but with the most aggressive, temporary runs making it down to 2.57. Notably, that's where they bounced on Friday and again this morning before settling in around 2.61.
Fannie 4.0s are in a similar situation with the analogous level being 105-05. They're currently off those highs and back down to 105-00.
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