Welcome to a crazy day for markets, maybe.  It's a quadruple witching session, meaning that futures and options for single stocks and stock indices are all expiring on the same day.  It happens 4 times a year and though it's seen more than a few sideways, uneventful turnouts, it's known for inspiring inexplicable volatility.  Add to that the fact that it's an early close for bond markets (2pm Eastern) and that it bookends a 3-day holiday weekend, and there are plenty of ingredients to make things quite hectic in the morning hours.

The other matter at hand is the "do or die" situation that MBS find themselves in.  We can use the following chart to  map that out:

The grey bars in the background are regular old Fannie 3.0 prices (high/low), and the green line is a 9 day moving average--used as a fairly mainstream short term smoother of daily prices.  Note that prices are currently break below a previous major support level (5) for the first time, well...  Ever.  The only past example that's remotely similar was when we hit post QE3 lows (2), and then bounced (3), just before moving lower.  As you can see, that didn't turn out so well, with the average never breaking above the one-time support level, and instead making a point of it to treat it as resistance (4).  If there's any saving grace it's that there's a bit of room inside the broader downtrend to hit the lower support line (just below the "5") and still have some hope for a bounce back into that range.   The only report of the day is Durable Goods at 8:30am, which does move markets half the time.  Even then, the movement will be in before rate sheets and very well may be trumped by the tradeflow necessities of the Quadruple Witching day.