A break below a big psychological technical level in bond yields can be a great thing to behold, but it can also be a signal that it's time for bonds to bounce.  Bonds have now gone 7 weeks (barring catastrophe tomorrow) without losing ground.  The last time that happened was the summer of 2012 (which was the golden age of low, stable interest rates at home and abroad, and everyone knew it).

I'm not saying that the party is over--not by any means--just that we need to be on the lookout for an intermission.  Either way, based on the Fed's verbiage yesterday, there's a lot riding on July's first week of economic data.  It's hard to imagine a profound move in either direction until we know where that data falls.  It's easy to imagine bonds might want to do just a bit more to catch their breath if there's a chance they'll be asked to rally deeper in 1% territory in 2 weeks.

10's were as low as 1.973% on two occasions today.  Each time they bounced decisively.  By the end of the day, yields were back at unchanged levels day-over-day.  MBS were mostly in the same boat, but Fannie 3.0 coupons managed to retain 2 ticks (0.06) of strength vs yesterday's latest levels.