Steady Gains After Slightly Weaker Start

Bonds began the day in slightly weaker territory, but not for any particular reason (and certainly for no interesting reasons). For those who care about such things, the yield curve continued to steepen (shorter term yields outperforming longer term yields), but this is fairly irrelevant to the mortgage world as MBS are relatively neutral in curve trading terms (durations are short enough not to get hurt when 30yr bonds are hurting, and long enough to avoid getting hurt when 2yr yields are hurting). Speaking of the neutral part of the curve, today's 5yr auction ended up fairly strong and the reaction helped yields hit their best levels of the day in the afternoon.  That said, all of the above is playing out on a micro scale in the bigger picture.  We're basically just drifting from one jobs report to the next.