Not many moving part to today's trading session...  Bonds were modestly stronger overnight, mostly in order to keep some semblance of pace with better gains in Europe.  The start of the NYSE session brought an asset allocation trade out of bonds and into stocks, but it ran its course in less than an hour.

Yields were near unchanged levels when the 5yr auction came in with stronger than expected results.  This helped bonds pick up a bit of ground, but they promptly lost it heading into the 3pm CME close.  Late day newswires regarding Treasury potentially issuing super long-term debt hurt yields for about 90 seconds before they returned to unchanged levels.

In short, it was a boring day for Treasuries and the broader bond market... EXACTLY what MBS were looking for!  Fannie 3.0 coupons gained an eighth of a point on the day.  10yr notes only managed half that.  While this is a very modest level of outperformance, we shouldn't expect any given day to offer much better when it comes to time healing MBS wounds.  Even then there will be back and forth.