The past 5 days have simply seen rates grind around recent lows.  Things have been a bit brighter in Treasuries compared to MBS, but in general, both have traded increasingly narrow ranges near the best levels of the year (again, that's more true for Treasuries, but not entirely untrue for MBS).

Yesterday's weakness acted as another bounce that keeps us "grinding around" so to speak.  We've discussed this noisy, important zone in terms of 2.47% in 10yr yields, with a break below 2.40 needed for outright confirmation that we're moving through the zone (2.34 would be the warning track before concluding a 2014 Treasury rally knocked it out of the park).

Prospects for ongoing strength (and much of the strength seen so far this year) have been closely tied to goings-on in European markets.  However frustrating the recovery in the US might be, Europe's is even more so.  Market participants are holding out the possibility that the European Central Bank is only getting started with a new push of easing measures announced last month. 

German yields (the benchmark for the Eurozone) are trading near all-time lows, and could break to new lows with the next small rally.  Whenever they break the consolidative trend seen in the chart below, Treasuries may have their chance to break their own version.

Today's key data is New Home Sales at 10am.  Before that, Jobless Claims are expected to rise to 308k from 302k.  Keep in mind that New Home Sales had a BIG beat last time, and because today's forecast calls for a pull back, if we don't see one, market participants may take that as an extra bullish indicator for housing.  On the other hand, it's hard to be extra bullish about housing considering the lower section of the following chart.