10yr yields had been careful to avoid dipping below yesterday's latest levels until after all of this morning's data was out of the way.  Once it was, a glut of buying came through in spite of the as-expected ISM data.  This can be explained in part simply by the balance of the morning's data being slightly weaker, but the pace of the rally suggests 'tradeflow considerations' adding to the positivity behind the scenes.

(what are tradeflow considerations?)

After moving below 2.646, 10yr yields found their next technical ledge at 2.62 and bounced excessively until 11:42.  The resulting break led to another flush of momentum with traders who had been betting on a move higher in rates being forced to buy and cover their losses. 

10's are now down to 2.61, but made it as low as 2.603--effectively the bottom end of the 3-month range.  MBS are underperforming today, but still following Treasuries.  Fannie 4.0s are up 7 ticks at 104-31.  Several lenders have already repriced positively and the possibility remains at current levels.