Today's 10yr auction was pretty good, although it required a bit of weakness leading up to it in order to generate the relatively strong result.  The overall level of demand was right in line with recent averages, and at yields that were just a bit lower than what traders were prepared for.  But again, that "preparation" was evident in the Treasury-specific weakness this morning.  This is especially noticeable from 11am as MBS held sideways while 10yr yields rose 2bps.  They've gained back about 1.5 of those so far--nearly unchanged day-over-day.

Same as it ever was, the most profound outperformance has been in European bond markets.  German Bunds haven't even been gaining as much as other countries, but they have a more direct correlation with US Treasuries traditionally, and even they have been handily outperforming.  Bunds and Treasuries were both mixed overnight with the former pushing down to more new all-time lows by the morning hours of the domestic session.  Treasuries were obviously reluctant to follow with the auction on tap, but nonetheless were dragged back to unchanged levels by 11am.