Bond Markets Challenging Resistance after AM Gains Treasuries rose to their highest levels since July 2011 overnight as Asian and European markets extended yesterday's post-FOMC sell-off. That's not an uncommon occurrence when the US trading session gets news late in the day (after Asia and Europe are done for the day), and not necessarily indicative of an ongoing trend. That's being born out today with 10yr yields returning to the high 2.8's after slightly higher Jobless Claims. They had been as high as 2.936 overnight and stood at 2.91 before the claims data. They're currently challenging the lows of the day at 2.886 (failing so far). For their part, MBS have tread a similar path since 8am, coming into the domestic session at their weakest levels in over 2 years but improving after Claims. Fannie 4.0s started at 101-28 and are up to 102-04 currently. This mirrors Treasuries in that MBS are just a step away from 102-05 highs and have bounced around this narrow range several times without breaking any lower (yet). There is no other significant scheduled data for the day, but snippets of Fed-speak may trickle in from Jackson hole--though it's hard to imagine what new information would come to light considering their message hasn't much changed for 3 months today.