Weaker Start, But MBS Outperform

The week got off to a weaker start with most of the losses seen during the overnight session, but gradual ongoing selling during domestic hours.  There were no overt market movers behind the weakness unless we want to give credit to anxiety over the Treasury auction cycle or technical resistance.  Even if auctions aren't the source of the outright weakness, they do likely have a hand in helping MBS outperform today.  5.5 UMBS were only down about an eighth of a point while Treasuries with comparable durations had lost roughly twice as much ground (implication being that MBS don't have to worry about 3 big supply gluts to start the week).

Market Movement Recap
09:44 AM

Moderately weaker overnight and now choppy/sideways.  10yr up 3.9bps at 4.241.  MBS down an eighth.

11:01 AM

Treasuries underperforming with 10yr up 4.7bp at 4.249.  MBS down 5 ticks (.16).

03:35 PM

MBS continue outperforming, down only 3 ticks (.09).  10yr up 5.1bps at 4.253.

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