Today's trading session has been a classic example of what we sometimes refer to as an unofficial 3rd day of the weekend. This is somewhat surprising, given that Friday was a high-volume, high-movement day, and that today's economic calendar had at least one big-ticket market mover.  Even so, the absence of volume and volatility speak for themselves.

MBS have been outperforming Treasuries for a few reasons.  The easiest observation to make is that Treasuries outperformed MBS on Friday, and today is payback.  It's not uncommon for Treasuries to lead bigger, risk-off moves and for MBS to close the gap when Treasuries settle down.  That's exactly what the 2-day pattern looks like.

A fairly active slate of corporate bond issuance is also causing some extra pressure for Treasuries.  To understand why corporate issuance affects Treasuries more than MBS, read this primer.