Bond markets took their own sweet time getting back to business after the holiday weekend. Trading activity was lighter than normal and apart from the morning's first round of economic data, market movements were based more on inbound trades rather than data and headlines.
MBS began the day unchanged and promptly lost an eighth of a point after stronger Durable Goods data. Just as promptly, prices bounced back and then some, following a technical bounce in Treasuries.
After another round of selling and bouncing, both Treasuries and MBS finally settled in for a disjointed afternoon rally that now looks like it will leave MBS at their best closing levels since October. More than a few lenders released positive reprices, but in general, fewer than you might expect given the price gains.
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