What's going on?

Bonds are much stronger overnight, with Treasuries leading the way and MBS underperforming.

What's behind the move?

Last night's news of a US drone strike in Iran that killed a top military official.  Iran vows retaliation, etc.

How do we know this is what's driving the market?

The news of Soleimani's death was confirmed right when the big move begins in the white box area below.

Why are MBS only 3 ticks (0.09) higher on the day then?!

Because that's what we'd expect to see when the bond market is responding to a massive geopolitical risk.  Treasuries always lead the way.  Not only that, but MBS have outperformed SIGNIFICANTLY throughout December, and it wouldn't be a surprise to see them give a bit of that outperformance back simply for technical reasons.  Add geopolitical risk-driven motivations to the picture and the case for Treasury outperformance is crystal clear.  Nothing to worry about during rally moves...