Bond markets went into the locker room after this morning's econ data fairly discouraged, but not enough to give up.  That was less obviously the case between 10 and 11am when MBS were over a quarter of a point weaker on the day and 10yr yields were up nearly 6bps.  Both bounced modestly in the other direction after that.

The bounce is probably attributable to the droning support from month-end tradeflows seen so far this week.  That would go a long way toward explaining bond markets' ability to stem losses even as stocks continue to new highs.  It also raises some concern as to the implication for Monday, though the ISM Manufacturing data is more likely to set the tone.

As for the rest of today, the afternoon positivity is almost up to the task of suggesting positive reprices for a select few lenders.  At the moment, Fannie 3.5s and 4.0s are each .125 higher than 10am levels.