Bond markets gave back a small chunk of yesterday's rally heading into the overnight session on comments from the Bank of England regarding an accelerated rate-hike outlook.  At least that's where most of the blame for this morning's weakness seems to have fallen.  In actuality, one could simply point to the fact that rates hit technical resistance well before the BOE news (10yr yields bouncing before breaking 2.57) and that anything between there and 2.66 would be fair game unless we found reason to extend the rally.

In other words, yesterday's positive session meant we had a shot at a stronger move lower in rate or that we'd simply be leveling-off between the two closest technical levels, 2.57 and 2.66.  In terms of Fannie 3.5s, this is approximately 101-20 to 102-10. 

Treasuries actually were able to improve for much of the overnight session, but changed course after stronger Eurozone employment data.  It's not that the data was any sort of barn-burner.  It just wasn't what we needed to break 2.57%.  On a Friday without any big data ahead, if Treasuries weren't going to break 2.57, and if the supportive ceiling in the range is up around the mid 2.6's, a quick move up to the low 2.6's is not too much to ask--and a pretty ho-hum sell-off at that!

That's what we got this morning, and as traders came on line after 8:20am, they were in general agreement about reinforcing the range trade.  All this means is that no grand aspirations emerged overnight or today.  Markets are deferring judgment on their next move until at least next week.  The result is that we're not carving out any new gains (beyond yesterday's best levels) today, but the consolation is that we held ground without making any new lows.

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
97-26 : -0-03
FNMA 3.5
101-30 : -0-03
FNMA 4.0
105-05 : -0-02
2 YR
0.4593 : +0.0363
10 YR
2.6024 : +0.0164
30 YR
3.4067 : -0.0023
Pricing as of 6/13/14 12:40PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:53AM  :  Empire Strikes Back! (Except Empire = Bond Markets)
9:49AM  :  Why are Bond Markets Giving Back Yesterday's Gains?

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "from bofa, our tracking model now suggests growth of -1.9% in 1Q and 4.0% in 2Q for a first half average of just 1.0%.... Momentum is weak, but fundamentals are strong. We have lowered second half growth to 3.0% from 3.4%"
Christopher Stevens  :  "This is the one I was talking abou MG"
Matthew Graham  :  "fast stoch, otherwise, yes"
Jeff Anderson  :  "So are those 3, RSI, MACD, and Slo Stoch, MG?"
Matthew Graham  :  "stockcharts is a great site for foundational learning on techs. He explains it better than I can or will."
Christopher Stevens  :  "MG explained the three in an earlier post a few weeks ago. Perhaps he can repost. "
Hugh W. Page  :  "JA - Might be a better explanation somewhere else but here's one"
Jeff Anderson  :  "What are the 3 tech indicators at the bottom of the chart? RSI, MACD, Slo Stoch? Others?"
Andy Pada, Jr.  :  "because iraq on the brink of civil war"
Sung Kim  :  "why is Iraq getting so much coverage"
Hugh W. Page  :  "MG your clear and simple explanations of technical factors is so helpful (like in today's day ahead)."