The S&P closed at its lowest level since April 2014 today and intraday prices were at their lowest levels since February 2014.  If yesterday's $28/barrel oil prices didn't sound low enough, they nearly broke below $26/barrel today.  In short, global risk markets continued melting down in grand fashion and bond markets continued picking up the pieces.

Even after equities markets staged a fairly serious attempt at bouncing, stocks remained in negative territory on the day and bond markets retained most of their overnight gains.  After coming into the day at 101-18, Fannie 3.0s went out the door at 101-16, more than a 3/8th point gain on the day.  10yr yields ended 6.8bps lower at 1.988. 

With Housing Starts coming in at 1.149 vs 1.20 forecasts and CPI missing estimates by 0.1, we can't really make a case that economic data should have had any impact.  If we were forced, we'd probably agree that 2 reports coming in weaker would be good for bonds.  Instead, that was one of the only times of day that bond markets were selling, further reinforcing the fact that bonds are primarily watching the unfolding drama in equities markets.  The depth and longevity of the rally is only limited by the same facets of stocks' bear market.