First off, it's important to note that everything is still playing out inside a narrow range overall.  We're about to discuss improvements in bond markets, but they haven't even gotten us back to positive territory on the day, let alone though yesterday's strongest levels.  Still, being close to unchanged on the day feels like a victory compared to what we might have expected given the morning's news.

Particularly, Greece's bailout process is moving right along.  Finland--one of the two countries that had expressed the most opposition to the bailout--voted to approve it this morning.  They also voted to approve Greece's much-needed bridge financing (because the actual bailout is still a ways off).  The latter is already a done deal as of this morning, giving Greece €7 bln to meet its important near-term obligations (especially July 20th ECB payment). 

With the bridge financing in place, the ECB was sanguine this morning with respect to reopening Greece's emergency liquidity assistance.  They're proceeding under the assumption that Greece is and will continue to be a member of the Eurozone, and they will help however they can. 

We could well have expected more weakness on such developments, but we're just not seeing it.  German bund markets are in weaker territory, to be sure, but it's very contained.  With that being the case, US markets have been more free to react to this morning's economic data.  The biggest input in that regard has been the much weaker than expected Philly Fed data.  Bonds rallied noticeably after that, with MBS and Treasuries both getting very close to unchanged territory on a day where--by all rights--we can be thankful not to be losing more ground. 

Bottom line: no big picture trends have been decided, and we generally continue to hold sideways inside June/July's range.  It's becoming less and less clear what it will take to break higher or lower.