Relative to the first two days of the week, today's biggest loser (in terms of bond yields) is Europe.  German Bund yields rose less than Treasuries in the overnight session, fell first, and fell more overall.  The initial motivation was a strong German debt auction at 5:30am ET, but weak economic data in the Eurozone helped as well.

Treasuries resisted the rally at first (see the yellow line above staying mostly sideways today until just after 8am).  When Retail Sales came in weaker than expected, US bond markets had their cue to embark on their own rally.  MBS have done a good job keeping pace with Treasuries and are, in fact, outperforming compared to yesterday's ranges (i.e. MBS are into new highs while Treasuries are still in the 2-day range--likely a factor of pre-auction anxiety).