On a few occasions during the past few weeks, I've brought MBS underperformance to your attention.  Specifically, MBS and mortgage rates hadn't been improving as robustly as Treasuries since yields topped out back in mid-February (or again on March 21st).  A chart of Treasury yields vs mortgage rates shows Treasuries steadily declining (even if the pace is "moderate" at best) while mortgage rates have been essentially flat.

Today, the show was on the other foot.  10yr yields rose more than 5bps throughout the domestic session as the stock market staged yet another comeback.  During the same time, MBS loss less than 5/32nds in price.  Or, in terms of apples to apples, 10yr Treasury PRICES fell 6/32nds today while MBS prices only fell 2/32nds day-over-day.

The discrepancy is even more stark if we consider mortgage rates.  Most lenders are steady to slightly lower compared to Yesterday.  Treasuries, on the other hand, are roughly 2bps higher across the board.

All that having been said, it's Treasuries that we should be watching when it comes to getting a sense of broader bond market momentum, whereas MBS and mortgage rates are more like backward-looking reflections of the bond movement that just happened.  

Once again, it was the stock market that set the tone for bonds.  The overnight session saw a tariff announcement from China that sent stocks scrambling lower.  But the selling wasn't enough to threaten recent lows in stocks.  After stocks bounced, it was pretty much a straight, but gently sloped line higher for both stock prices and bond yields into the end of the domestic session.  10yr yields are right on the verge of breaking back above 2.80%.