Treasury yields and equities began the overnight session moving higher after stronger manufacturing data in China.  Treasuries managed to hold their ground while stocks continued higher.  The onset of the European trading session helped bonds even more.  There has been an impressively sharp rally in European bond markets and a nearly as impressive selling spree in European equities markets. 

Economic data didn't provide much by way of inspiration for bonds.  That's especially true of the 830am Jobless Claims data, which was completely passed-over.  The 10am ISM Manufacturing data was a slightly different story, but not because the results suggested something new about the nature of the economy.  Instead, this looks like market participants were making sure they were in position to capitalize on a weak report (i.e. bond rally) and then simply sold bonds when the data wasn't too much weaker than expected.

Were it not for the European influences, US Treasuries and MBS might not be faring as well as they are, post-ISM.  Even then, we're just barely into positive territory.  With European markets closing, this raises the risk of an afternoon bounce for bonds.   It looks like we're trying to fight that off presently.  2.04% is the line in the sand for 10yr yields (i.e. if yields cross above that, it would confirm a negative bounce).