Bond markets lost ground overnight, moving resolutely higher in yield during the European session.  The Treasury weakness is notable in that it occurred amid flat-to-weaker trading in stocks.  After trading in close correlation to start the month, yields and stock prices are increasingly diverging.  This could be meaningful for some unknown reason, but more likely is the increased money-manager cash flow heading into the mid-month tax deadline.

This morning'sd Housing Starts data (1.206 mln vs 1.15 mln forecast) didn't do anything to stem the tide of weakness that had carried over from the overnight session.  By 10am, yields had topped out at 2.079 and Fannie 3.0 MBS hit their lowest levels at 101-13.  Both are little-changed since then, but have come back just a bit.

In the bigger picture, today's weakness is very much in line with the broader consolidation range highlighted in the Day Ahead (the dotted lines in the chart).  There were no takeaways from any of this morning's Fed speakers, leaving bonds to simply drift within that range.