Stock prices and bond yields closed at their lowest levels in more than a year yesterday.  Today was largely spent consolidating that move.  With Chinese markets still closed for the Lunar New Year holiday, Asian markets found little resistance in getting caught up with yesterday's trading.  That led bond yields even lower at the start of the overnight session with 10yr yields bottoming out at 1.682.

The tone shifted when European markets opened, but not because of any fundamental revelations about the economic or monetary situation.  Stocks and bond yields moved back up, with 10yr Treasuries briefly as high as 1.767.  They would ultimately make it back into the green, but clearly without aspirations for another big rally.

In fact, any bond market aspirations looked wholly tied to equities markets.  With stocks having a mostly flat day, bonds followed suit.  MBS did a better job of keeping pace with Treasuries today, largely because markets were much flatter.  Fannie 3.0s ended up 5 ticks at 102-23 as 10yr yields fell 2bps to 1.728.