Bonds gave back a slice of the morning session by midday — 10-year Treasury back up to 4.48%, UMBS 5.0 at 98.07, off 6 basis points from the morning open at 98.13.

Wednesday's early optimism has faded some. The 10-year yield reversed course intraday, ticking back up to 4.482% after opening near 4.47%. UMBS 5.0 slipped to 98.07 from morning's 98.13, still holding above yesterday's close but no longer building on it. The peace-deal tailwind that drove Tuesday's 50-bps surge appears to have been mostly priced in — today's session looks like consolidation rather than continuation.

Rate sheets remain at 6.61% for now, and the overall level holds. But midday softening usually means lenders won't chase a reprice higher. The gains from Tuesday are intact. What's being tested today is whether bonds can hold that level or whether some of Tuesday's move gets unwound. The answer so far: partial hold, slight fade.

— David Burson, NetRate Mortgage