It was an exceptionally flat day for MBS with Fannie 3.5s holding between 103-24 and 103-27 for the entire session.  More than 90% of today's trades took place within half a tick of 103-26.  If there was a detectable bias, it was toward slightly stronger levels as the day progressed. 

The same couldn't be said for Treasuries, which generally weakened overnight and into the domestic session.  The major issue for Treasuries was corporate issuance.  That means that corporations announced new bond offerings.  These not only bring extra supply to bond markets, but the financial firms that conduct the sales often sell Treasuries as a part of the hedging process, thus making for a double whammy for Treasuries.  If it seems like I've been harping on this before, during, and after it happened, it's only because there hasn't been much else to discuss.

There were no significant economic reports today and the 3yr Treasury auction was totally vanilla.  Even then, 3yr auctions don't tend to have much impact on the MBS coupons that matter for rate sheets.  If there's a consolation in the bigger picture, it's that longer-term Treasury yields continued to hold their recent range, where 2.20 is a loose guideline for the ceiling.