Inexplicable bond market resilience isn't always about the Eurozone, but sometimes it is, and today is one of those times.

In order to have inexplicable resilience, there must first be explicable (or how about 'understandable' weakness).  That's an easy correlation to spot this morning given the +288k NFP result vs a 212k forecast.

As you'd expect, this made for strong sell-off to start the day.  That said, these post-NFP moves can be much bigger than today's.  Not only that, but the weakest point in the sell-off was seen within the first 5 minutes, with trading levels generally bouncing back after that.

A tame ISM Non-Manufacturing report at 10am helped facilitate the ongoing bounce, but the most important thing it did was to help European bond markets finally make it back to a technical level in German Bunds.  Crossing that level led to a noticeable pick-up in follow-through buying, which in turn led to some of that 'inexplicable' resilience for domestic bond markets.

At this point, MBS are barely any weaker on the day with Fannie 3.5s only down 3 ticks at 102-03.