Bonds drifted into slightly stronger territory in the overnight session.  The move was seemingly devoid of inspiration and had a very technical, mechanical look to it.  If there was underlying inspiration, it was the movement in the yield curve (the gap between 2 and 10yr yields in this case). 

News and developments that make Fed rate cuts less likely only fan the fires of yield curve inversion (i.e. they put upward pressure on shorter-term yields like 2s).  While movement in one section of the curve doesn't always imply movement elsewhere, this arguably has a positive impact on longer-term rates (like 10s) at present because it tacitly implies the Fed wouldn't be doing enough to ensure a soft landing.  It also further inverts the curve which is seen--rightly or wrongly--as a recession indicator.  Recessions are generally great for 10yr yields.

On top of that, there was an op-ed piece by former NY Fed Pres. Dudley out overnight.  Dudley said the Fed should simply refuse to cut rates for what are most succinctly described as political reasons (though it was pitched as being in the best interest of the economy in the long run). While there wasn't much of an outright reaction, this could have been in the back of some traders' minds as they continued chasing the yield curve to more and more inverted levels.

Finally, Consumer Confidence was stronger than expected.  Stronger econ data may or may not have much of an implication for 10yr yields depending on the day.  In the current environment, it's more likely to be used as a very VERY small course correction for Fed rate cut expectations.  Small though it may have been, it added to the curve breaking another post-crisis record, which in turn served as a technical cue for just a bit more curve trading (sell 2s, buy 10s, or  buy 2s, buy more 10s).

MBS made gains, but didn't keep pace--par for the recent course on any day where 10s are down more than a bp or two.