Both Treasuries and MBS hit the 8am mark right in line with Friday's latest levels. As the domestic bond market session officially got underway with the 8:20am pit open, buyers were in control (i.e. prices up, yields down).
Without any economic data or significant headlines to trade, guidance comes from technical levels and simply from traders watching and reacting to incoming trades. To that end, 2.525 in 10yr yields served as a ceiling both on Friday afternoon and first thing this morning.
10yr yields moved down to 2.50 in fairly short order. Fannie 3.5s followed the positivity with their own move up to 102-15 from 102-10 at the start. Gains ultimately extended to 102-17 heading into the 11am hour and are back to 102-13 now--still 4 ticks (.125) up on the day. 10yr yields dipped as low as 2.495 and are back up to 2.511 currently--still 0.007% lower on the day.
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