After adding half a point yesterday, Fannie 3.5 MBS are up another half point today (Fannie 3.5s as of 11:55am) as the ill effects of the government shutdown and debt ceiling drama are priced out of bond markets. Both MBS and Treasuries have moved precisely to the narrow ranges that prevailed before the onset of volatility inspired by the fiscal issues. 10yr yields, at that time, favored a range of 2.59 to 2.67 and these levels just happen to bookend today’s trading range as well. This could merely be a coincidence or it could speak to the fiscal issues being a diversion that temporarily challenged a narrow range otherwise content to wait for the next big trading cue from the jobs report we never got on 10/4. As of now, we’re still waiting to find out when NFP will be rescheduled.