While geopolitical tensions in Ukraine are certainly affecting markets, they're not affecting all markets equally.  Core European debt has consistently responded to headlines with more volatility than US Treasuries, let alone MBS--another degree less interested.  For all the air-time this situation has received, it risks being overestimated when it comes to domestic market impact.  For instance, the emerging market gyrations heading into February were far more noticeable for both stocks and bonds whereas geopolitical risk tends to have a more muted effect.

In the chart above, if it weren't for the highlighted section at the right, we might never know it wasn't just another day for stocks and bonds.  The same clearly can't be said if we look at something like the MSCI Russia ETF.

Even German Bunds (Germany's 10yr sovereign debt) show much more reaction than US Treasuries.  In the following chart, Bunds and Treasuries have been aligned based on highs and lows from the first half of February.  Note how Bunds begin to pull away significantly into the end of the month and again yesterday.

All of this begs the question: if US bond markets aren't necessarily having a pronounced response to Ukraine, where has the recent positivity been coming from?  First, keep in mind that there is a response, even if it's not pronounced.  Additionally, the technical landscape left a bit more room to run for the recent rally.  All it needed was an excuse and the Ukraine headlines were sufficient.  They'll likely continue to guide short term movement and likely in the same muted way by the time MBS and mortgage rates feel it.  The ramping-up of economic data starting Wednesday is a good opportunity to see just how quickly something else could take over as the most relevant market mover.

There are no significant economic reports on tap today (not to be confused with the national ISM data, ISM New York at 9:45am sounds significant, but it's not).