It was the first day back from the holiday market delirium and market participants needed a touchstone to kick things off. They found it in the form of manufacturing data out of China. This might not have been too big of a deal had it happened in the middle of the year, but it was today's muse for most of the morning.
China's CSI300 index dropped 7%, which is the "circuit breaker" level resulting in trading shutting down. Other indices continued to trade... poorly. The weakness in Asian equities markets spilled over into global equities markets. It also translated to strength for safe havens such as US Treasuries.
Domestic bond markets rode that wave until European markets closed. At that point, gains began to evaporate. The losses were quick enough for several negative reprices in the mortgage world, but day-over-day gains remained intact by the close.
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