From Thursday's latest levels, Fannie 3.5s are 3/32nds higher in price, compared to a 9/32nds gain in 10yr Treasuries (also in price).  That means Treasuries are doing a bit better today.  There's not much to infer here, and Treasuries had been underperforming MBS so far in July--just something to keep an eye on as we tend to discuss broader momentum in terms of the Treasury range.

Current gains bring Treasury yields back BELOW pre-NFP levels from Thursday.  MBS are still a few ticks away.

There have been no significant market movers in play today, no significant correlation to other markets (stocks are following, but certainly not in lock-step), and hardly any activity in general.  When volume and participation is as low as it is today, markets are more easily moved by whoever is left trading. 

One of the only conclusions that's even remotely plausible is that we have some light movement back into bonds and out of stocks as a part of the "new quarter" position squaring.  In other words, some traders began selling bonds and buying stocks into the first few days of July.  NFP provided an opportunity to do even more of that, and now we're seeing some correction. 

The other, more obvious conclusion is that US bond markets continue feeling the weight of European bond markets as the gap between Treasuries and European benchmarks widened again today.  That means EU yields are falling faster than and exerting some positive pressure on US yields.