Treasuries have been trending weaker this morning--especially longer-dated Treasuries (like 10yr notes and 30yr bonds).  This is somewhat understandable given that they're 2 of the stars of this week's Treasury auction supply, but they're also under pressure from a healthy slate of corporate bond issuance this morning.  (Here's the primer on how corporate bonds affect Treasuries/MBS/rates).

MBS have been doing a great job holding steady despite the persistent weakness in Treasuries.  Fannie 3.5s haven't dipped below 101-27 despite several bounces.  During the same time that MBS have been holding that ground, 10yr yields have risen 2bps and are at the day's highs currently.

There is only so much of this that MBS will be willing to take before they fall below 101-27 and possibly add a few more ticks of weakness.  10yr yields are at 2.491 currently and there's a small intermediate pivot point just overhead at 2.495.  If that's broken, MBS will likely lose at least enough tick.  At that point, we'd start to consider negative reprices for early/aggressive lenders.