Through midweek last week, mortgages experienced modest two-way flows and a less supportive tone versus the first week of November.

Heavy and widespread buying - pushed by the improvement in Libor and dollar rolls - had Barclays Capital's MBS Index outperforming Treasurys by 89 basis points through Nov. 7. This, in turn, has made investors more cautious about protecting their gains in the current financial environment.

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