Please explain what it means when Agency MBS outperforms their treasury hedges for the month/qtr.
MBS are mortgage backed securities. which compete with treasuries (government bonds, especially the benchmark 10 year) for buyers looking for stable returns on their investment. Sometimes MBS and treasuries move together, either higher or lower. At others, one may outperform (post larger gains) than the other. If, for instance, the 10 year US Bond went up 5/32 in price in a day, and MBS went up 9/32, the MBS gains were larger, so MBS "outperformed". Hope that helps. Ted