MBS Outperform as Treasuries Get Hit by Issuance By 4pm, 5.0 MBS are only down a hair over an eighth of a point, and had bounced back by more than quarter point from mid-day lows.  Treasuries, on the other hand, were still up 8bps in yield, and close enough to their weakest levels of the day.  The latter have been hit harder by issuance headwinds.  This refers not only to the Treasury auction cycle on the calendar, but also to the more variable landscape of corporate debt, which has a bigger impact on Treasuries vs MBS. Curve trading also continues to weigh on 10s (2yr yields were up only 3bps).  In the bigger picture, this just looks like consolidation ahead of Thursday's CPI data. Econ Data / EventsWholesale Inventories 1.0 vs 1.0 f'cast, 1.0 prev Market Movement Recap09:01 AM Moderately weaker overnight with some additional selling in early US trading.  Modest bounce just now as Powell didn't comment on policy in today's scheduled speech.  10yr up 4.7bps on the day at 3.573 and MBS are down only 3 ticks (.09). 11:46 AM Weakness is snowballing a bit, 10yr up 10.7bps at 3.634 and MBS down 3/8ths. 02:28 PM Decent bounce back in the PM hours, but more so for MBS than Treasuries.  10yr still up 8.4bps at 3.611 and MBS down just over an eighth of a point (but up a quarter point from AM lows).