A noncommittal, sideways grind only has so much noncommittal and sideways in it before breaking out.  This one was already overdue and already showing signs that it was on its last legs (especially with respect to the technical bounce threat in Europe and the suggestion from Pending Home Sales that this morning's Existing Home Sales data might be even stronger than expected).

Bonds were already on the run by the time Existing Home Sales came out.  Europe was clearly leading the charge there, though corporate bond market hedging was also taking a toll.  Sales indeed came out much stronger than expected (5.19 mln vs 5.03 mln forecast and 4.89 previous).  After that, the selling picked up as bonds confirmed technical breakouts and followed through to the next support zone near 1.98.  In the chart below, the blue line is the 25 day moving average and the sickly yellow line is the 100 day.

MBS aren't selling off quite as abruptly, but are nonetheless off just over a quarter of a point.  Much of that was seen after the morning's first rate sheets, making for negative reprices from multiple lenders so far.