• Big rally in oil brings stocks back up and keeps pressure on bonds
• Corporate debt supply also hurt Treasuries specifically, but earlier in the day
• MBS underperformed as the day progressed, ended down nearly a quarter point
• Few reprices and rate sheets not far off Friday's

Bond markets had an interesting day, but not in the traditional sense where something interesting happens.  Instead, bonds were very flat, albeit at slightly weaker levels than Friday.  What's interesting is the process of considering why that might be, and whether or not our conclusion would matter.

When it comes to "mattering," market watchers often give more weight to more volume.  With that in mind, Friday's session saw just under 1.6 million 10yr futures contracts (a good proxy for bond market activity).  In contrast, today saw just over 845k, the lowest of the year.  That's a good argument to take everything with a grain of salt, even though bond markets didn't really go anywhere surprising considering the surrounding activity.

The weakness had the look and feel of market movement that could be described with words like "incidental" and "afterthought."  If we want to point the finger at potential underlying motivations beyond simple momentum, we could cite higher oil prices along with a fairly robust day of corporate bond issuance (which puts pressure on bond prices by creating more supply in the market and because Treasuries can be sold as a part of the hedging process).