By the time yesterday's FOMC Minutes were out, European and Asian markets were already closed.  As such, their overnight reaction was not too surprising.  Stocks and bond yields moved lower, and some of that momentum came back to benefit US bond markets.  By the 8am open, Treasuries were 3bps lower and Fannie 3.5s were a quarter point higher than yesterday's latest levels.

Economic data had come and gone, and bonds remained in line with opening levels.  There was a promising rally following the 10am data, although it didn't look like it was inspired by the data as much as heavy selling in European equities markets.  Add to that the fact that we just saw a good pop of bond buying at the 1pm (which is both the European close and today's 5yr TIPS auction) and it's safe to conclude that economic data wasn't a factor in today's movement.

This can be forgiven, considering the data was all close to consensus.  Without input from data, markets have simply turned to other guidance givers.  Heading into the 1pm hour, Treasuries and MBS are both at their best levels of the day, though they are definitely encountering increased resistance as they improve.  10's are bumping against a floor around 2.07 and Fannie 3.5s are hitting a firm ceiling at 103-31.  If these are broken, it would be a meaningful positive development.