S&Ps opened lower and traded higher before closing near the same level they opened yesterday. This tells us the stock market is indecisive after S&Ps broke 200 day moving average. Benchmark yields moved lower across the curve yesterday. The 10yr note was the best performer, falling 4.4bps to 3.264% (+12 at 101-31). The 2 yr note dropped 2.4bps to 0.734% (+01 at 100-01.). Although price action has been choppy lately, interest rates have generally performed well while the pain trade plays out in equity and forex markets. Mortgages have had a rough go at it over the last two days. Prices moved lower and yield spreads wider, this is not normal behavior for mortgage-backs. Their relative value generally improves (yield spreads tighter) as benchmark yields rise (implies borrowers will have less incentive to refinance). Cheaper valuations were due though, production MBS coupons were a bit overbought....