MBS and Treasuries got a boost in general from earlier news that Germany is pushing to limit the expansion of EU bailout funds. Further improvements were seen on a noticeable drop in stocks just after 10:30am, assumed to be related to the petroleuum report. Technicals and tradeflows are coming into effect here ahead of the auction with stocks selling even more and Treasuries chasing to a surprising extent. MBS are doing their best to keep up with Treasuries, currently moving into their highs of the day.
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