Some parts of the bond market are indeed merely APPROACHING their worst levels of the day, while others are already there.  Stocks are fairly flat, and there is no headline shocker driving bond prices down. Volume overall is healthy today, but nowhere near the first two days of the week.  Rather than what you will probably hear or read in other financial news, the moves this afternoon appear largely technical in nature and to be a factor of tradeflows and timing.  The fed was in big early this morning, buying in the 10yr range, keeping yields low.  Once they were down, the market was free to drift higher, toward a logical test of something very close to 2.9.

10yr futures are similarly at their worst levels of the day.  But note the volume...

As we like to point out, noticeable breaks out of ranges aren't nearly as significant as they would be if they were accompanied by an uptick in volume.  But today's slide comes after the 3pm close and in low volume.  In fact, weighting the prices by volume yields a rather flat-ish line (blue line is VWAP)

To make matters even more yawn-inducing, MBS haven't experienced afore-mentioned drama to the same extend as the 10yr.  Not really sure if that's more a factor of "mortgages vs. treasuries" (spreads haven't really moved enough to say definitively) or more likely, merely a factor of duration.  Simply put, shorter duration is winning today, both in treasuries and MBS.  That means 2's and 3's are actually slightly improved today, while 5's, 7's, 10's, and 30's are weaker and weaker the longer the duration. MBS 4.0's being a bit shorter duration than 10yr tsy's (closer to 5's), are hovering within a tick or two of unchanged on the day.

And that's pretty much where things look to be going out today.  Volume continues to dwindle, 10yr futures will probably grind around that 124-26 to 124-27 level and 10yr notes having just escaped the 2.90 range will languish only slightly thereunder, grinding around the 2.88-2.87 range in low volume.

Reprices for the worse continue to be a risk short term.  Longer term, remember, we're more concerned with the big 'ol double top seen at 2.96 in the 10yr, and can safely consider today another day in which yields are below that mark.