In the day just passed, bonds continued to rally as more details about recent trade war drama unfolded.  Actually, those details unfolded late Monday and were simply traded yesterday morning.  Notably absent from the rally was the MBS market (for the most part). 

Expect that to continue today if early trading is any indication.  But also expect it to be a double-edged sword.  In other words, if Treasuries sell off, MBS should sell off less.

There are no significant economic reports on tap but the Treasury auction cycle hits its stride with 10yr Notes at 1pm.  Yesterday's 3yr auction was somewhat weak and traders took it as a cue to buy longer-term Treasuries.  If today's longer-term (10yr, in this case) auction is average or better, we should see some additional buying.

In the bigger-picture technical sense, the trade war drama has helped yields move below 2 important levels recently (2.50 and 2.47).  The next challenge is 2.44%, but the caveat is that falling Treasury yields may be like so many trees falling in the woods.  They may not be making a sound if the MBS market isn't willing or able to hear it.