Bond markets are off to a rocky start this morning with moderate overnight weakness giving way to increased selling momentum at the start of the NYSE Open.  Stocks have been a relevant consideration for bonds in general as each have been trying to decide what to do with themselves after grinding sideways for most of the past 2 months.  

To be sure, stocks had been holding in a much more 'sideways' pattern than Treasuries.  The two haven't been completely joined at the hip, and that's a good thing.  If Treasuries were perfectly mirroring stock momentum at the moment, we'd be pushing into the highest yields in more than 2 years.  As it stands, we're simply "getting close."

10yr yields are up 4.6bps at 2.5116 and Fannie 3.5s are down a quarter point on the day (and an eighth of a point from some lenders' rate sheet print times).  As such, some of the earlier, more aggressive lenders may already be considering negative reprices.