The alert that you're reading began its life as a mere "update" to let you know we'd bounced heading into the NYSE open, failed to gain traction, and were now watching the week's ceiling levels of 1.587 with intraday highs at 1.573% in 10yr yields.

Considering 1.573 just got taken out, that volume is picking up, and that European bonds are surging higher in yield, we'll move straight to the "alert."

Fannie 3.0s are now down 6 ticks on the day with some lenders already looking at enough of a drop to justify negative reprice risk.  This would only be the earliest, most aggressive lenders at this point, but the trend doesn't bode well for the middle of the pack.

European headlines are driving the sudden move and it's exacerbated by generally light volume and liquidity on a data-free summertime Friday.