Things were looking up as of yesterday's close.  After weeks of selling off with only a brief 1.5 day correction last Thursday and Friday, bonds finally had a green day that didn't rock the boat.  Specifically, it was a relatively calm session where trading levels never broke outside the previous day's range and where the previous day hadn't set new highs in the rate trend.  No other green day can say this since mid-April 

As we discuss fairly constantly, so much of the recent sell-off has been due to core European bond markets.  It is quite interesting to note that core European bond markets were largely closed yesterday.  Could this be the only reason things seemed to take a positive turn at home? 

That's a question that's ponderous more than it is answerable, but it will be interesting to see how US and European markets react to each other when they're both on the clock at the same time again.  Whether or not that's today (because there is not an official holiday in Europe) or Monday (because an official holiday yesterday could prompt many market participants to take an unofficial holiday today) remains to be seen.

As far as what US markets can tell us in and of themselves, we're not flying completely blind.  Even before yesterday's European holiday, we had a decent show of support after Wednesday's spike to 2015 highs in yield (or lows in terms of MBS prices).  Apart from NFP Friday, last Wednesday was the first day since April 27th that didn't break the intraday highs of the previous session (in other words, everything else had at least some trading in weaker territory than even the weakest levels from the previous day).

In other words, we're on the lookout for another bounce.  In watching and waiting for such happy things to happen, it's always worth wondering whether or not domestic data will matter.  It's certainly not a given these days, but if any report is more likely to be a market mover tomorrow, it's probably Industrial Production numbers at 9:15am.