MBS did a great job of fending off an onslaught of Treasury weakness today.  MBS outperformance is a relatively foreign concept of late, but we do tend to see it if Treasuries lose ground quickly enough.  Today, however, it was possible even without a significant slide in bond prices.

The reason for the exceptional behavior was a very Treasury-specific set of concerns driving selling pressure.  These include the week's Treasury auction cycle (not typically enough for underperformance in and of itself) and more importantly, a big glut of corporate bond issuance.  

The first corporate-bond-related selling spree happened early in the 9am hour, but was unwound by 11am.  After that, more corporate deals continued to pound Treasuries with MBS holding flat until after 4pm.  At that point, the entire bond complex had weakened enough that MBS were eventually forced to give up a few ticks, but even then, it was only 2/32nds versus the 8/32nds lost in 10yr Notes.