The type of positive economic headlines seen yesterday would normally lead to lower bond prices and higher mortgage rates, but that turned out to be far from the case. And though MBS initially moved lower, that trend soon reversed and we saw the best day of gains all month as the internal components...
While more risk averse fixed income securities received a continued flight to safety bid today, the MBS coupon stack was subjected to an influx of available supply due to originator's decisions to sell sell sell. Mortgages were outperformed by Treasuries, Agency Debt, and Swaps as market participants...