Bonds rallied overnight thanks to weaker econ data in Europe and managed to build modestly on those gains throughout the domestic session. The most notable scheduled calendar event turned out to be the 3yr Treasury auction at 1pm. It had a noticeably positive (but not huge) impact on both the long and the short end of the yield curve. Bonds hit their best levels at 2pm and leveled off after that. The gains ended up erasing about half of the weakness seen since Friday morning, and all of the weakness seen since Friday's close.
Slightly stronger overnight, led by Europe. 10yr down 3.9bps at 4.608. MBS down 1 tick (0.03) but illiquid (would be slightly stronger otherwise).
Strong 3yr auction helping a bit. 10yr down 6.8bps at 4.579. MBS up just over a quarter point.
Best levels of the day at 2pm, with 10s briefly hitting 4.546, but bouncing back since then. Right in line with the previous update.
MBS out with a quarter point gain on the day. 10yr down almost 8bps at 4.569.
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