Once again, economic data has been a non-event in terms of market movement.  Instead, two other sources of inspiration clearly stand out for US bond markets today.  European bond market strength led the charge overnight.  Right from the outset, core European yields were only moving two directions, both of them "lower."   For German Bunds, this meant a return to the 0.9's, and ultimately a run to 0.97.

Treasuries stayed in relative lock-step during that time, with 10's falling from 2.57 to 2.535 initially.  A second wave of buying commenced at the start of the cash equities session ("cash" = 9:30am.  Anything prior is "futures," though futures also continue trading during the cash session).  Stocks tanked early and often.  S&P's were down around 20 points in the first hour.  Treasuries certainly weren't eager to follow at the same pace, but they did follow, further extending gains to 2.515.  

MBS benefited less by comparison.  This isn't anything to be sad about, however, as MBS had previously done a much better job holding their ground in the face of bond market weakness yesterday.  Fannie 3.5s opened 4 ticks higher (.125) and added another 4 ticks by noon, bringing prices to 102-07.