Both stocks and bonds have been edging back into less panicked territory after trade war drama fizzled out last week.  In other words, stock prices and bond yields were moving higher together.  To be fair, bonds got one last rally push from Italy/EU drama mid-week (stocks didn't care as much about that one).  Either way, by the end of last week the worst of the "risk-off" momentum appeared to be over and momentum looked to be shifting back in the other direction.

Overnight weakness in equities markets threatened to push bond yields back down and create a green day for rates as opposed to modest weakness implied by the recent trend.  But stocks were only ever looking panicked in the overnight and early morning hours.  As soon as the 9:30am NYSE session got underway, stocks found their footing, and bonds left the party.

10yr yields rose from roughly 2.39 to nearly 2.42% in short order and then leveled off in the afternoon.

Fannie 3.5 MBS fell fairly steadily throughout the day, ultimately losing just over an eighth of a point.

There were no significant economic reports, but several big corporate bond offerings may have added to the general sense of pressure on bonds.  Perhaps even more important was the fact that today's volume was the lowest since April 29th.  Thus, some of the weakness could purely be a factor of iilliquidity.