The beginning of the overnight session  was uneventful, with relatively little movement until European markets came online.  From there, bond markets weakened, resulting in slightly higher yields and lower prices to start the domestic session.

There was no scheduled data earlier in the morning, but the 10am reading of ISM's Non-Manufacturing index was stronger than expected.  In fact, it was the highest since 2005 (but had been fairly close to that distinction already).  Factory Orders data was also stronger, but carries less weight than ISM.

Bond markets slid further after the data and equities markets rebounded modestly.  Prices moved low enough that some lenders are facing over an eighth of a point drop since initial rate sheets.  This leaves the door open for moderate negative reprice risk.  That said, we haven't seen any yet, and no new lows have been made since 10:40am.