Treasuries Weaker, MBS Stronger as Domestic Session Lurches Forward
Treasuries drifted slightly lower in yield during the overnight session, but everything before the domestic session has been uneventful and fairly light in terms of volume. Things aren't much busier now, but the onset of domestic trading in combination with European markets' bigger movements is making for some volatility in Treasuries now.
10yr yields followed German Bunds higher starting just after 7am. MBS experienced a small amount of weakness at the 8am open as the Treasury move continued, but both have since bounced. Said bounce has seen Treasuries level off in slightly negative territory while MBS have done more with it. Fannie 4.0s and 3.5s are up 3 and 2 ticks respectively.
There are no economic reports or headlines driving the movement, and there's nothing interesting on the calendar for the rest of the day. As such, current trading can be seen as somewhat revealing (i.e. "what would markets do of their own accord?"). In that sense, this is an argument for post-NFP positivity to have run its course on Friday.