In the day just passed, the bond market got off to a slow and stable start for the week.  There was modest overnight weakness that carried over into the start of the domestic session, but a significantly weaker-than-expected Chicago PMI report helped bonds recover and ultimately move microscopically lower in yield.  

In the day ahead, the week's data relevance will continue to build as the important ISM Manufacturing report is released at 10am ET.  Though not quite in the same league as something like Friday's Nonfarm Payrolls data, the ISM reports are about as big as it gets in terms of potential market movers (at least if we're only talking about economic data).  

As the consolidation range runs out of room, we're expecting a breakout any time now.  In fact, overnight trading already challenged yesterday's iteration of this chart, so today's version has somewhat more gently sloped lines:

If some combination of the data and general technical momentum result in bigger moves, at best, it's a blessing and a curse for the mortgage market.  If yields break lower, mortgage rates would fall, but they'd definitely struggle to keep pace.  If yields break higher, mortgage rates could come a bit closer to 10yr yields, but would nonetheless have to move slightly higher themselves.  Either way, it's plain to see how much of an issue volatility has caused for the relative performance in the mortgage market since August.