MBS RECAP: Is it a Ceiling or a Floor? Bonds Aren't Telling

US bond markets were completely done moving by the time the domestic session began.  Case in point, 10yr yields ended the day at 1.473, exactly the same level seen at the 8:20am CME open.  You'll notice this is technically much better than yesterday's closing levels, around 1.51, and refreshingly better than yesterday's highs of 1.53.  All that having been said, it would have been much more refreshing to see a bit more commitment to the idea of heading back in the other direction.  As it stands, we can't really tell if we're looking at a floor or a ceiling in today's trading range.

This is a bit beside the point, however, for two reasons.  First of all, it wouldn't be too much of a surprise to see some indecision ahead of tomorrow's Bank of England announcement.  Everyone figures they'll do "something," but traders tend not to get too carried away until they know exactly what that might be.  Then there's the matter of oxygen.  A long-term rally needs to come up for air from time to time, and the last two days of weakness don't look like quite enough air to justify another aggressive push down into all time low rates.  As such, muddling around in the current territory (or even giving up some ground) would probably be healthier in the long run, as blasphemous as that may sound today.