Bond Markets Hold Technical Support Overnight, Slightly Stronger This Morning
For all intents and purposes, the overnight and early morning story has been about a simple 'range-holding' in domestic bond markets. 10yr yields hit 2.66 on the nose overnight and bounced well before anything from the European session suggested a move lower.
Point being, it would be easy enough to say that Bank of England's 'Minutes' release--which was an obvious net-positive for EU bond markets--was somehow helping US bond markets, but the fact is they'd already definitively helped themselves. In fact, when EU bond markets moved into weaker territory right at their open, Treasuries didn't really budge (10's were very close to 2.66 at the time).
It looks like the range will persist into the afternoon's FOMC events. 10yr yields improved moderately most of the morning, bringing MBS along for the ride. 10's are down 1.8bps on the day to 2.635 and Fannie 3.5s are up 5 ticks at 101-27.
The FOMC Announcement and Economic Projections are out at 2pm and Yellen's Press Conference begins at 2:30pm.