Bonds digested the week's busiest day of economic data, by far, today.  But markets in general are only interested in data that changes the economic narrative. Today's only real candidate in that regard would have been a surprisingly weak Retail Sales report. Since we didn't get that (it was stronger), bonds underwent a token sell-off and were quickly right back to paying attention to other things. 

Europe volunteered to be one of those "other things" today with talk of central bank stimulus from an ECB official.  There were also a few blows traded in the trade war saga with China vowing "countermeasures" and Trump tweeting that any trade deal had to be on "our terms." No game changers there, but they certainly didn't hurt bonds.

The afternoon saw a snowball buying spree when 10yr yields moved past the overnight lows. The rally kept rolling until yields hit 1.475% before bouncing back up to 1.53% before settling somewhere in between by the close.

Refreshingly, MBS have been doing a MUCH BETTER job of keeping pace with broader bond market movement. Lenders won't necessarily be able to do that much justice, but why would they if they're already slammed and any bigger rate improvements will just cause lots of lock fallout? That said, they definitely have some room to give pricing a bump, and they'll likely do just that on any day where bonds are stable-to-stronger.