Fannie 3.5 MBS are heading out the door nearly half a point better at 102-09.  10yr yields are down 6bps at 2.498.  While they didn't quite make it to the 2.47 technical level, the move from 2.57 yesterday to 2.48 at today's lows is close enough for government work.   The other option in the event of a sell-off was to move up to the 2.66 technical level.

For a while this morning, it looked like that might be a risk.  10yr yields were as high as 2.5907 before NFP came out weaker than expected.  Even after the data helped bond markets recover, they didn't seem all too convinced and twice returned to nearly unchanged levels by 10am.

From that point on, however, rates improved steadily and forcefully into the European close.  European markets continue to drag US rates lower than they otherwise might be.  The move was unified with global stock markets joining bond yields in heading to the day's lows. 

Once Europe was done, it was as if the weight was lifted off US markets.  Both stocks and bonds immediately and calmly rebounded in the other direction.  The bounce back never materialized into anything too threatening for MBS/Treasuries and the only reprices of the day were of the positive variety during and after the mid-day rally.