Another day, another vague newswire fueled by "people familiar with the matter."

Of course, it must be a Fed (musical) Chair headline:

TRUMP IS SAID TO LEAN TOWARD POWELL AS NEXT FED CHAIR

That is the source of the most recent surge in bond yields--"surge" being a relative term at the moment, because any small amount of buying feels like a surge in the recent context. 

As we've noted, bond markets prefer Powell (stocks too for that matter, because Powell is viewed as more dovish with respect to monetary policy).

Here's the available portion of the underlying story for more context:

By Jennifer Jacobs
(Bloomberg) -- President Donald Trump is leaning toward
appointing Federal Reserve Governor Jerome Powell to be the next
chairman of the Fed, according to three people familiar with the
matter.
The decision isn’t yet final, the people cautioned, and
Trump could change his mind at any time. Yet his preference for
Powell dims current Fed Chair Janet Yellen’s chances for a
second term at the helm of the world’s largest central bank.

This is the umpteenth time we've seen some iteration of sources cautioning reporters that "Trump could change his mind at any time."  

Yeah, ya think?

Still, markets will take whatever they can get, because as we've discussed, the Fed Chairmanship is a big deal.  Even if it's a groundless rumor, it's still worth trading a few bps into stronger territory.  And that's all we have for now with 10yr yields down 2.9bps at 2.4337, still well short of the 2.42% we'd really need to break before allowing a bit more sunshine into our gloomy cave overlooking the landscape of bond market momentum.

MBS are up more than an eighth of a point since rate sheets, so lenders with hearts might throw out a token reprice if we hold these gains, but they'll have to stick around for a while for the average lender to consider it.