Today is one of those days where Treasury movements definitely do not tell the story for MBS.  Today's Senate headlines on the upcoming Fannie/Freddie wind-down bill combined with monthly settlement flows made for a lot of variation between MBS Prices and Treasuries.  That was almost an exclusively negative affair in the morning as MBS underperformed significantly. 

While both sides of the market were weaker at 10:30am, Treasuries embarked on a nice bounce back while MBS didn't really catch on until after 1pm.  By that time, 10yr yields were already back in positive territory.  MBS were still 5 ticks weaker. 

The Treasury rally progressed into the afternoon as equities continued selling-off.  MBS were more willing to come along for that ride, and ultimately moved back within 1 tick of unchanged on the day.  A few lenders repriced negatively in the morning, and fewer still--positively in the afternoon. 

Here's a look at MBS Prices vs Treasury Futures prices to illustrate the underperformance surrounding the Senate headlines and subsequent reluctance to bounce back.