Bond Markets are seeing the sharpest reversal of morning weakness since--well, there's not a recent example that measures up.  That's because most big moves in the morning are either products of economic data or significant headlines and in those cases, the movement follows the suggestion of the data.

In today's case, we have markets initially moving in the direction suggested by the data (weaker bond markets), but more than reversing that weakness for no apparent reason.  Yes, we've seen/heard the excuse that Ukraine headlines are in play, but people who actually trade enough money to move markets saw these headlines more than half an hour before the move started!  You might see a 30 second gap between news and movement from time to time, but never 30 minutes.

All we have at the moment is an aggressive morning sell-off in stocks and aggressive bond-buying in Europe (which still exerts some force on US Treasuries at this time of day).  10yr yields are back in line with yesterday's latest levels and MBS are 4 ticks into positive territory. 

Treasuries were slightly weaker overnight, holding flat during Asian market hours and rising in yield during the European session.  The 8:30am economic data hasn't helped.

Even though Jobless Claims were higher than expected, markets are focusing more on the big beat in Durable Goods as well as a drop in the level of ongoing jobless claims (the headline number is just "initial claims."  Here's a breakdown of both:

Jobless Claims

• 329k vs 310k forecast
• Continued Claims 2.68 mln vs 2.75 mln forecast
• Thoughts on share of market movement: 5/10.  If we break this down by Initial vs Continued Claims, the focus is more on the latter, which is negative for bond markets, though the rise in the former may be acting to restrain bigger selling pressure.  Even then, some of the rise in the initial number is being chalked up to the holiday week, which doesn't make much sense, but is being talked about nonetheless.

Durable Goods

• +2.6 in March vs +2.0 forecast
• Biggest rise since November
• Excluding Transportation +2.0, biggest rise since January 2013
• Thoughts on share of market movement: 5/10. The combination of a strong Durables report and the drop in continued claims makes for a 'two against one' fight against a Jobless Claims headline that's not excessively weak to begin with.  The selling makes sense and the silver lining is that market movement is at least connecting more directly with economic data.

So far, 10yr yields are up 4bps at 2.724.  That's 12 ticks in terms of price.  MBS, meanwhile, are only down 3 ticks so far with Fannie 4.0s at 104-05.  There is no other significant data this morning, but Treasury auctions wrap up this afternoon with 7yr Notes at 1pm.