Bond Markets Bouncing Back after Slightly Weaker Open
Treasury yields traded in modestly lower territory for most of the overnight session, and even managed to hold gains in spite of stronger data out of Germany (which would typically have pulled yields higher in concert with German Bund yields). On a negative note, 2.721 was prodded on several occasions and now suggests itself as a short term resistance level. It would be a positive development if we manage to break lower than that today.
Treasuries began losing some ground in the hour before the domestic open. 10's crossed 8am about 0.005% higher, and have recovered a bit since then. MBS are still getting their sea legs about them but are similarly showing a bit of strength after opening weaker. Fannie 4.0s actually just ticked up to +0-01.
Today is the slowest of the week in terms of scheduled events. Markit's version of Non-Manufacturing PMI just reported much weaker than expected, but there was no visible effect on trading levels. If anything, the bias has been positive since about 8:30am, but the overall range is still narrow.