Bonds began the day in inconsequentially stronger territory and soon moved to the worst levels in a week leading up to the 5yr Treasury auction.  The auction's stats were much stronger compared to recent averages.  This would normally bode well for bond markets (and today was no exception), but we might be justified in reading a little bit more positivity into the results considering the auction occurred in the shadow of the Fed Minutes set to hit the wires just 1 hour later.

The Fed Minutes turned out to be helpful in their own right.  Not only did the Fed express some rate-hike hesitation, but they reinvestment discussion seems to have evolved in a less terrifying way than some bond traders had imagined.  Specifically, there was no mention of outright bond sales (a particular concern for MBS markets), and the scheduled reductions will only change in 3-month intervals (whereas "tapering" took place at every Fed meeting).  All in all, the Fed Minutes were bond-friendly.

Rates rallied into the afternoon, but not so much that we should tune out and assume the best going forward.  2.25% was the most recent technical ceiling in 10yr yields (hit on multiple occasions May 18-22) and then became a floor for this afternoon's rally.  Without a firm break below 2.25%, the risk remains on the table that today's gains were more of nominal correction to selling sentiment that merely got a bit carried away.