It's a special time for bond markets where the interest of bulls and bears are relatively aligned.  Unfortunately for those of us watching from the mortgage market perspective, the joint interest is in higher rates. 

Nothing too complicated here, and it goes back to my assessment of the last FOMC Announcement.  I said it would significantly increase the odds that the Fed hikes in December and that it would be relatively foolish for long-term bond bulls to try to swim against the trading current that would likely be shifting increasingly against them.  This was all about "new entry points" for bulls.

In other words, even if you believe that rates will be lower in the long run due to underlying economic weakness at home and abroad, you're still better served by helping push rates higher in the short term.  This helps set up cheaper buying prices for you to re-enter the market for your expected longer-term rally. 

So did the last announcement really crank up the rate hike expectations?  Is that really what the recent 10yr/MBS pain is about?  Most definitely!

It's as yet unclear how much economic data will matter to the Fed over the next month and a half, if at all.  I would wager that the data matters far less to them than the average market participant thinks it should.  The Fed sounds like it has mostly made up its mind to hike and just got cold feet in September due to China-related drama. 

This business of assessing the Fed's true leaning (because we've seen Jekyll and Hyde in the last 2 announcements) will get a big boost today from speeches by the top 3 officials (Yellen, Fischer, and Dudley).  Depending on what they say, it could be an even bigger market movement consideration than the economic data, which begins early with ADP Employment at 8:15am.