Early Gains. Flat Afternoon. MBS Underperform

Early Gains. Flat Afternoon. MBS Underperform Friday ended up offering a boring conclusion to a week that had at least some measure of excitement on Wednesday. Bonds started a hair stronger, lost ground modestly and then rallied to the day's best levels by noon. From there, 10yr yields went perfectly sideways in an ultra narrow range. MBS managed to hang on to just barely positive levels but gave up about an eighth of a point during the time Treasuries were holding steady. Technically, this is underperformance in a vacuum, but in the bigger picture, MBS have been doing just fine in relative terms. As a reminder, next week is 3.5 days thanks to Independence Day observance, and the jobs report will be on Thursday morning.  Market Movement Recap 09:04 AM Stronger overnight, but bouncing back a bit now. 10yr up 0.3bps and MBS unchanged. 12:04 PM Near strongest levels. MBS up an eighth and 10yr down 1.8bps at 4.373 04:29 PM Off strongest levels in MBS, now up only 2 ticks (.06). 10yr down 1.9bps at 4.372