Typically, negative economic data on the scale of this morning's New Home Sales would be a clearly positive factor for bond prices.  Sales fell at their fastest pace since last July and last month's strong report was revised to mediocre levels.  In one fell swoop, the entire shape of 2014 New Home Sales went from "gradually improving" to "sideways and maybe slightly weaker." 

Yet bond markets barely batted an eye at the data!  At best, we could say that it helped stem the existing losses and encourage sideways movement, but it certainly didn't prompt any major bounce back. 

Pervasive weakness had been a problem almost right from the start of the overnight session.  After recovering to 'unchanged' by the start of the European session, US Treasuries were almost exclusively higher in yield for the rest of the night.  Stronger Jobless Claims data didn't help, but even then, there is EXISTING weakness in bond markets today. 

The potential saving grace at the moment is the supportive ceiling that's being carved out at 2.518% in 10yr yields.  A break above that would confirm a shift up and out of the low, narrow, mid-July trend we've recently enjoyed.