After being closed for Labor Day yesterday, the bond market is noticeably weaker to start the new week.  In the overnight session alone, yields rose enough to being 10yr yields up to an important technical ceiling at 1.375.  This matches the intraday high from 2 weeks ago and is just under the 1.379 high from 4 weeks ago. 

Incidentally all 3 visits to this ceiling have occurred on Treasury auction days.  To whatever extent "supply" concerns are behind the weakness, extra pressure is being added this morning from corporate bond issuance.  If bonds follow their typical pattern of continuing to lose ground until getting mostly through the auction process, the next major technical level is 1.43% in 10yr yields. 

The silver lining to supply-driven weakness is that MBS tend to outperform.  That's the case so far today with 2.0 UMBS coupons down only an eighth of a point (.125) in price while 10yr Treasuries are down 3 times as much.  Even 5yr Treasuries are down .19.