Calmly and coolly, MBS marched to the best levels of the year this afternoon, and for no particular reason as far as today's events were concerned. As was the case yesterday, there were various headlines surrounding Ukraine/Russia, but not of them looked overly connected to market movement.
Treasuries came out of the gate strong at the 8:20am 'pit open' at the CME, quickly erasing overnight losses and moving under 2.60% in terms of 10yr yields. MBS made a similar move but stayed steadier in their pace of improvement throughout the day.
Fannie 4.0s are currently drifting out at 105-08, up 7 ticks on the day and Fannie 3.5s are at 102-03, also up 7/32nds. Several lenders released positive reprices in the afternoon.
Tomorrow brings a more relevant Treasury auction with 10yr Notes at 1pm. Before that however, Fed Chair Yellen begins 2 days of testimony at Congress. The first day of these semi-annual testimonies is typically the bigger potential market mover, and bonds continue being "ready" to confirm or stage a breakout of their Feb-Present range.
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