The most notable feature of today's trading session has been the weaker than expected components of the Durable Goods data.  In other words, the headline was better than expected, but the internals were weaker.  Specifically, the internal component that factors out defense spending and aircraft was -.5 percent weaker versus forecasts for a 0.3 percent improvement.  Additionally, the previous reading of that component was revised to -2.2 from -1.1.

This gave bonds a boost at the outset.  Both Treasuries and MBS moved into positive territory after beginning the day slightly weaker.  The gains have been mostly maintained amid quiet Friday trading conditions. 

The afternoon presents some headwinds though.  I alluded to these in this morning's commentary, saying that opportunistic traders may try to get ahead of next week's corporate bond issuance.  It's anticipated to be another robust week for corporate debt--at least ahead of the Fed--and corporate debt makes for some pressure on Treasuries and MBS.  We may already be seeing the early stages of the potential afternoon pressure as bonds have given back some of the gains starting around 11:30.