Bond Markets Bounce Back Overnight We've wondered aloud when and if anyone would step in and catch the falling knife that is a low-liquidity bond market selling spree. We now have a contender. Treasuries were very well-bought overnight with high-volume moves lower in yield both in the Asian and European sessions. 10's moved from 2.883 to 2.805 by 4am with some of the best overnight volume this year. So far this morning, the domestic session has been less than eager to extend the rally, but simply holding sideways leaves us 5bps lower in 10s and 11 ticks higher in Fannie 4.0 MBS. There is no significant data on the calendar, leaving traders to watch and react to other traders and technical levels. In that regard, 2.84 is shaping up as a pivot point, serving not only as yesterday's key resistance but also as a supportive level today. Add to that the fact that the initial rally in the Asian session saw 10's stop almost perfectly under 2.84 and we have a pretty good line in the sand to assess any leveling-off potential as we move further into domestic hours.