What began as a rather unassuming summertime Wednesday quickly turned in to one of the biggest rally days in weeks for bonds.  10yr yields moved more than 6bps lower to end the day well under the important 2.06% technical level and Fannie 3.0 MBS gained a quarter of a point.

Although there was economic data in play this morning (slightly weaker construction numbers), it certainly wasn't the driver of the move.  In fact, looking beyond the headline actually showed improvements in single-family construction numbers.  More importantly, bonds really didn't do much until after 10am.

The same time frame corresponds to fairly brisk losses in the stock market.  Bonds and stocks don't always follow each other.  Many times, they move in opposite directions--especially when they're trading Fed accommodation probabilities.  But today marked one of the biggest days of stock selling since late May (when Trump announced Mexico tariffs).  It was enough to invigorate any gains to which bonds were already predisposed.