It's not uncommon to see MBS outperform their Treasury benchmarks in the run up to a round of weekly Treasury auctions only to underperform when the auction cycle wraps up. That underperformance (or rather, Treasury outperformance) was on full display today with MBS losing about a quarter point while 5yr notes lost about half as much. While bonds are slightly closer to the weaker end of the recent range, they're still very much inside it.
Market Movement Recap
09:25 AM
Moderately weaker so far with 5.0 coupons down 6 ticks (.19) and 10yr yields up 2.6bps at 4.143
11:45 AM
flat since last update. MBS down 6 ticks (.19) and 10yr up 1.9bps at 4.136
01:04 PM
Slightly weaker bond auction = slightly weaker response. MBS down 7 ticks (.22) and 10yr up 2.9bps at 4.146