Bond markets began the week on something of a volatile note.  Treasuries had weakened slightly in the overnight session and MBS walked in the door about an eighth of a point lower than Friday's latest levels (in terms of Fannie 4.0s).  They're currently back at those same levels, but there's been several back-and-forth swings in the meantime.

The first move down saw a gradual loss of another 4/32nds, bringing bond markets to their worst levels of the day just after 9am.  A much weaker than expected reading on the Chicago PMI data failed to have the anticipated result (i.e. there was no noticeably positive bounce for bond markets despite the weaker data).

Moments later, however, Fed Chair Yellen was out with some ostensibly reassuring comments on the Fed's current approach to accommodation, chiefly that "extraordinary commitment to stimulus will be needed for some time--a view widely shared by fellow policymakers."  Bond markets saw a VERY brief bounce toward the best levels of the day, but nearly as quickly, were right back to the weakest levels. 

There aren't any great explanations for the pervasive negativity this morning, other than the pervasive positivity last week perhaps seeing some measure of correction.  There were several headlines regarding a reduction of Russian troops at the Ukrainian border, but none of them seemed to line up well with market movements.  Ultimately, bonds look like they're finding a bit of traction now as they've moved more calmly to their stronger levels yet again (though these are still in negative territory compared to Friday's close).