Month-end to the rescue!  We've been talking about it all week and now the phenomenon (month-end buying) is a major contributor in bond markets' ability to stem losses and bounce back today.  Some of the weakness was in place from the overnight session while the rest followed this morning's economic data--chiefly Chicago PMI.  After that, a steady bid carried both Treasuries and MBS most of the way back to unchanged levels.  Quite a few lenders repriced positively.

That leaves us somewhere between the mid-point and the stronger side of the recent range heading into next week's Nonfarm Payrolls number.  It's not a guarantee that rates will move higher now simply because month-end buying won't be around, but a stronger ISM report on Monday would definitely encourage such a reversal.  In short, look for more connectivity between data and market movements.  Today's Chicago PMI showed us what that looks like when it comes to stronger data, but the jury remains out on how much the weather will continue to discount the weaker data.