Bonds were in slightly weaker territory at 9:29am, but began improving immediately following the 9:30am NYSE open.  10yr yields followed stocks closely and were already back into positive territory before the 10am Consumer Sentiment data.  Here's a run-down:

• Consumer Sentiment
  • 97.8 vs 100.5 forecast, 101.4 previously
  • Current Conditions 115 vs 120 forecast
  • Expectations 86.8 vs 88.1 forecast
  • 1-year inflation expectations 2.7 vs 2.8 previously
  • 5-year inflation expectations 2.4 vs 2.5 previously

Following this data, bonds improved a bit more and stocks sold a bit more.  An uptick in volume suggests that a reaction to the data played a role, but it's not clear whether bonds were reacting to the data itself or to the additional stock selling that followed the data.  The two continue to be highly-correlated this morning.

10yr yields are currently down just over one basis point at 2.832 and Fannie 3.5 MBS are up nearly an eighth of a point at 99-26 (99.81).