There were several exciting lead changes in today's game for bond markets.  The early inning were devoted to parsing the European Central Bank's (ECB) announcement and subsequent press conference from ECB President Draghi.  In a nutshell, bonds liked the announcement at 7:45am but didn't much care for Draghi's comments (which began at 8:30am).  

After hitting the highest intraday yields since mid-2014, bond buyers jumped in the market and helped stop the bleeding.  This was somewhat reassuring actually, as we clearly witnessed "value buying" among traders who'd been sitting on their hands until yields got high enough.  It also means that 5 out of the past 5 trading days have seen 10yr yields hit intraday highs within 1bp of 2.666%. 

The technical bounce created some positive momentum heading into the exceptionally strong 7yr Treasury auction.  That strength kept the positive momentum intact all the way through the close, ultimately bringing 10yr yields to 2.615% before they bounced.  Incidentally, 2.615% is an important short-term floor that we'd like to see broken before getting more optimistic about a longer-lasting bounce.

MBS kept pace fairly well with Treasuries.  Fannie 3.5 coupons gained 5/32nds of a point to end at 101-17 (just over 101.5).