In terms of the event calendar, today was supposed to be quiet.  One of the wild cards laid out in this morning's commentary was an unexpected headline from Europe.  We ended up getting something to that effect early this morning with news that Greece's creditors were working on a debt deal. 

If you find it hard to care about those sorts of headlines after getting a different version of them hundreds of times in the past 5 years, you're not alone.  But core European bond markets cared enough to sell-off a bit more than they already were, thus pulling Treasuries along for the ride.

The overnight weakness had domestic traders lined up to jump back on the familiar wave of selling toward the other side of the range.  After all, we knew that last week's gains didn't constitute a compelling break of the range on the positive side.  Even as mainstream articles were saying there were signs the worst was over in the Treasury sell-off, we were discussing the prospects for increased corporate issuance this week and a move right back into the range (here). 

Weaker than expected Factory Orders were no help this morning, and that's no surprise.  Traders are working the range regardless of data.  That won't change until tomorrow morning with the ECB and ADP doubleheader.  Between now and then, we can only really hope to close at or below 2.28 in 10yr yields.  The comparable level in MBS is at or above 103-22 in Fannie 3.5s.