The afternoon’s 2yr Treasury auction was well-enough received to do no harm to the longer end of the Treasury curve (which correlates more to the MBS that most affect rate sheets). 2yr Auctions aren’t typically a consideration, but whereas they were altogether off the radar earlier this year, their effects are now occasionally noticeable.
Today may be an example of that as yields had been rising and MBS Prices had been falling from 11:30am to 1pm, but managed to hold their ground and bounce back a bit after the auction. Most importantly, today remains calm and trading ranges remains very narrow. Fannie 3.5s are still in positive territory, up 3 ticks at 102-23.