MBS and Treasuries are both in slightly positive territory, and that's saying something considering the apparent challenge involved in getting here.  Treasuries were weaker overnight, resulting in a weaker open for MBS as well.  Both actually remained in negative territory through the ADP Employment data at 8:15am, though it did help them find their footing.

The 2nd major report of the morning--ISM Non-manufacturing--was also weaker than expected.  It similarly contributed to bond markets holding their ground, but for the first 30 minutes after the report, trading continued to look conflicted and sideways as opposed to convincingly stronger. 

That could have to do with some predisposition for bond markets to get back to more neutral territory after the Ukraine-related panic subsided.  In that sense, this weaker data is trying to push MBS prices up a hill.  It's mostly been successful, but the challenge is apparent as Fannie 4.0s are only 4 ticks higher on the day.  10yr yields are a mere 0.005 lower.  Most of the improvement has come in the last hour.  Several lenders have repriced, but not by much.