Treasuries and MBS walked a cautious path to the exits today, staying perfectly inside the middle of yesterday's trading range.  The overnight session was less dramatic than recent examples and Treasury trading in Asia/Europe seemed less interested in Portuguese drama.

Interestingly enough, Treasuries actually performed better than German Bunds, hinting at some underlying/inherent strength in US bond markets.  MBS were feeling the same vibes and kept decent pace with the rally.

Prices improved steadily until just after the noon hour.  From there on out, everything went sideways after a brief correction.  Bonds seemed to take limited cues from equities markets, but volume and participation were so low that it doesn't make sense to read much into the movement.

Bottom line, looking at things from a 10yr Treasury perspective, yields are right near the zone that has seen the bigger bounces of 2014 (2.47-2.52).  The risk is that this becomes an extended resistance area that makes for a longer term bounce.  This could be ruled out with a break below 2.40, but until we're heading more convincingly in that direction or actually making that break, I'm feeling a bit more cautious heading into next week.