If anything, the extent to which spreads have blown up is a promising suggestion that value buying may help the rally continue. Remember that when spreads are wider (blown out, higher, gappy, etc...), then MBS is more attractive relative to benchmarks such as tsy's and swaps.
Other than that, the rally has been fairly stable all day, even containing a nice bounce of this AM's uptrend line as seen on the chart. Similarly, Tsy's are trending down, but are currently up against 3.47 which was the level they failed to break last time they dipped below 3.5. At any rate, you might see some lenders passing on gains this afternoon, and at this point, those who were inclined to float into today have good indication to continue to do so unless you get some big gains passed on.
Reason being: NFP sets a better tone for fixed income, and the previously mentioned spread situation.
The biggest risk we see to your rate sheets at the moment is a short covering rally in stocks and afternoon loss of liquidity in benchmark treasuries.
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2s vs. 10s:250bps
MBS Market Alerts
