After yesterday kicked off the new month with a quick return over 2.47 in 10yr Treasury yields, the overnight session kept the selling pressure intact.  This was less of an issue during Asian market hours (Treasuries actually recovered a bit), but strong labor data a decent read on inflation in the EU sent European bonds higher in yield, dragging US rates up with them.

10yr yields made it all the way to the doorstep of 2014's previous range (2.57) before the US session began.  They bounced early this morning right after European markets ended their selling spree.  Treasuries crossed the 8am threshold at 2.55 and MBS opened 5 ticks lower at 102-15. 

The day's economic data hasn't had much of an effect, though it didn't get in the way of morning selling pressure that took Treasuries back to their weakest levels from the overnight session and resulted in new lows for MBS.  Whether it's a technical bounce or a mere coincidence soon to result in more  weakness, 10yr yields have avoided a clear break above 2.57.  While that is a relevant technical level, the 4-day trend is clearly negative and also remains intact.  In other words, we can hope 2.57 holds up as a ceiling in 10yr yields, but there's still a real risk that it won't.