If bonds hadn't undergone their highest volume move of the year on Wednesday and Thursday, we would have expected this week to be relatively dead in terms of market movement potential.  There was nothing interesting on the event calendar, save for a few mid-tier economic reports.  There were no Treasury auctions, no expected fiscal developments, not even any interesting overseas events.

In short, this week was supposed to be a snoozer.  As we're now well aware, it's been anything but.

Yesterday's relative ground-holding (10yr yields generally held on to the strong gains seen on Wednesday) does two things.  First, it suggests that the rally wasn't some uncalculated knee-jerk.  Days like yesterday tend to suggest more sideways movement on days like today.

But because sideways movement is never guaranteed, yesterday also puts in a position to watch overhead levels for continued support.  This is how I see those levels, with the annotation corresponding to the visceral response bond bulls should have (and aren't we all?):

2017-5-19 open

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
102-32 : -0-03
10 YR
2.2415 : +0.0085
Pricing as of 5/19/17 9:09AMEST