February Coupons in Fannie and Freddie 30yr MBS (Class A),  have gone the way of the old gray mare, as we now welcome our new pal for the next 30 days: March Coupons!

The difference in price between the Feb and the March coupons was 14 ticks at closing time, making things look a lot worse than they were.

Organically, the 4.5 was down only 2 ticks today, but the net effect on the charts is a 16 drop that kicks off March Class A trading at 100-24.  That may seem like an appreciable distance from where we were, but consider the following chart.  Even after the drop, MBS fall in line with a sort of "ledge" of prices near that 100-24 level.

Today's weakness is attributable to several underlying events or pieces of data.  AM economic indicators didn't move things much, but ongoing scenes being written to the sovereign debt drama are a consideration, and of course, the auctions.  As far as tomorrow, it's tough to say whether or not the 10yr auction would trump some significant news about some sort of debt bailout for Greece.  Contributing to today's weakness in bonds was a story out on Germany's intent to potentially team up with other EU nations to guarantee some of Greece's debt.  If that story were to materialize in grand fashion tomorrow, it could have similar effects to the "dubai bubble" in 2009 where bond prices rapidly dropped following a similar backstop from the UAE.  That might do more harm to bonds that any good from a potentially bullish 10yr auction.