It's been a solid day for bond markets so far, with most of that solidness coming courtesy of a big correction to yesterday's European bond market weakness.  Some measure of positive bounce is logical given the boatloads of weaker economic data out overnight in Europe, but the rally was more aggressive than usual.

Treasuries took heart and followed German Bunds (the benchmark representative for "European Bond Markets") lower in yield.  10yr yields hit 8am right in line with yesterday's best levels and Fannie 3.5s opened roughly 6/32nds higher.  From there, the first round of morning data was largely ignored and gains continued.

The big turning point today was at 10am with the release of the Philly Fed survey, which beat its forecast by the largest amount ever, and rose to levels not seen since 1993.  What's more, the survey made no mention of special circumstances that might have contributed to the insanely high number.  Bonds lost all their domestic session gains, but are still holding on to some of the overnight gains.  In other words, trading levels are still better than they were at yesterday's close, and we've found just enough support to avoid negative reprices from all but one or two lenders.