Meaningful inputs have been few and far between for bond markets today.  With Japanese markets closed, overnight Treasury trading got off to a late start.  Stronger data out of Germany pushed yields quickly higher at 330am, but not by much.  10yr Treasuries only rose from 2.31 to 2.33 before leveling off.

That moderate overnight weakness led to MBS opening an eighth of a point lower in price (-4 ticks) at 103-18.  Prices didn't stray more than 1 tick for nearly 2 hours, and have since bounced back to unchanged levels.

At 9:45am Markit's Purchasing Manager's Index (PMI) came in at the lowest level since April.  This is the less-widely-followed mimetic version of the very important ISM PMI.  The Markit/ISM relationship is similar to ADP/NFP, though Markit tends to produce much less of a reaction.  It's bucking that trend to some extent today as bond markets began improving shortly thereafter.  Another consideration is that last week's booming Philly Fed survey is also a forward indicator for ISM.  That resulted in losses for bond markets and today's today tempers it somewhat.

Contributing to the bounce back around the same time, German Central Bank President Jens Weidmann (an outspoken critic of government bond buying, and most influential European Central Banker apart from Draghi) suggested any efforts to buy government bonds could encounter "legal limitations."  With market participants split fairly evenly on government bond buying, these volleys between Germany and Draghi have been having a noticeable effect.  At present, and unlike the domestic "QE on/off" trading reactions seen in 2012/2013, when the European QE looks more hindered, it's actually been better for bond markets as legitimate global growth concerns take center stage.  It was no surprise then, that Weidmann's comments added to bond market positivity.