Bonds were slightly stronger at the open, but are losing ground after the 8:30am econ data (GDP hit forecasts at 4.0% and Jobless Claims were better than forecast).  Yields moved into negative territory a few minutes ago with the 10yr now up to 1.026%.  Stocks are tracing the move.  There's a risk that we see a broad "risk-on" bounce with stocks and bond yields moving moderately to significantly higher today.  Stay frosty.

Now seeing the movement in Treasuries we were hoping NOT to see (new highs, up more than 4bps at 1.057) and the corresponding movement we feared in MBS (2.0 coupons down more than an eighth from highs and 1.5 coupons down almost a quarter of a point).  No major market movers behind the most recent bout of weakness although traders could be building in a concession for the upcoming Treasury auction.

7yr Treasury auction was decent but bonds didn't care.  30 minutes later and we're breaking into new high yields for the day.  MBS are following with prices down to new lows.  This is a broad momentum move and not motivated by anything new and specific.  Bonds probably wanted to bounce yesterday, but were forced to rally by the big drop in stocks.  Now that stocks are rebounding, we're seeing the true colors of the range-bound bounce.

Selling pressure may be leveling off here as Treasuries haven't made a new high since the last update (1:35pm).  Not much traction in the other direction.  MBS are still trading at their worst levels of the day, but that's not a huge deal considering they didn't lose nearly as much ground as Treasuries earlier in the day.