The Asian, European, and North American trading sessions were all dominated by news that China would devalue its currency.  There's much more to that story than meets the eye, and plenty of good recaps of the nuts and bolts.  But it's not the nuts and bolts that were the big market mover today--not yet anyway. 

Stocks and bonds moved very little relative to how much they would have moved if the Euro or Yen had tanked as much as Chinese currency did today.  The market-moving force for now is that China continues to desperately try buoying its decelerating growth.  Markets are getting the message that global growth might not be on track for as much strength as previously expected.

As such, we saw a nearly universal movement away from risk today with stocks, commodities, and bond yields all falling.  In US bond markets, it was enough for 10yr yields to break out of the recent consolidation pattern seen in the triangle below.  That's like the elimination round before getting a chance to do battle with the 2.14% yield level.  Incidentally, that's right where we closed.  A break below would be a big deal.

MBS responded fairly well to today's rally with Fannie 3.5s up nearly half a point to 104-01.  Rates matched the lowest levels in more than 2 months.