Domestic bond markets continue to be more-or-less glued to stocks.  Treasuries began flat in the overnight session, but yields soon began rising as equities began rising.  German Bunds followed the move as well, but even when they broke from the pack to rally back to unchanged levels in the early hours of the morning, Treasuries were more keen to follow equities.

Things looked fairly bleak heading into 10:30am.  10yr yields had moved as high as 2.086, breaking the 2.077 technical ceiling from the overnight session (yes, this 0.9 bps gap is splitting hairs in the bigger picture).  MBS were emulating the selling-spree, but in their characteristically junior-varsity way (i.e. smaller versions of the same moves seen in Treasuries).  In any event, Fannie 3.0s were just entering levels that would be consistent with negative reprice risk at the time.

Shortly before the oil inventory data came out, bonds found their footing.  From there, it's unclear whether the ensuing slide in oil prices was merely joining a bond rally already in progress or if it added to the resilience.  With the 10yr auction coming up at 1pm and a healthy dose of corporate bond issuance on tap, a case could be made for bonds being weaker were it not for the big drop in stocks and oil prices over the past hour.  We'll re-assess after the auction.