Though treasuries are exhibiting a slight preference for short duration today (2yr notes are about 1.5bps better on the day vs. 10yr notes), that dynamic is even more pronounced in MBS.  The 4.5 is down 10 ticks at 100-07 whereas the 6.0 is unchanged at 106-11.  Unfortunately, that's more of a point of curiosity than anything since lender's aren't exactly adjusting rate sheets based on the 6.0.

On the bright side, the losses that followed the 10yr auction have been fairly minimal, standing now at 2bps in the 10yr and about 6 ticks in MBS.  But the fact that said losses followed a bit of weakness this morning leaves the overall movement today in slightly worse shape.  After moving 10bps in a friendly direction yesterday, the 10yr has taken nearly 7 steps back. 

One more bright side would be the noticeable support kicking in at 3.8 for tsy's and 100-05 in MBS.  This leaves a few trends of improvement intact for the week and waiting on results of tomorrow's 30yr auction and Friday's data.  Any reprices for the worse seen today have likely already been seen and decision-making moves from intraday to overnight.

And in making that consideration, be advised tomorrow is the busiest day of data this week with the normal weekly jobless claims, then business inventories, the highly anticipated retail sales, and import/export prices all to have their say well before the 1pm auction.