Small Scale Volatility as Bonds Wait For Jobs Report Bonds lost ground this morning despite a weaker S&P PMI headline.  While there were some mitigating factors beyond the headline, we could just as easily conclude that traders are erring on the side of caution heading into a week of Treasury auction supply with another big jobs report on Friday--all while being forced to wait an unknown amount of time to find out where the rubber meets the road on fiscal policies that could further affect the outlook for the economy, inflation, and Treasury issuance.  All told, today's volatility was mild at best and we didn't learn anything new about the bigger picture. Econ Data / EventsS&P Services PMI56.8 vs 58.5 f'cast Market Movement Recap09:47 AM Slightly stronger overnight but backtracking in first 2 hours.  MBS down 2 ticks (.06) and 10yr up 2.4bps at 4.622 10:37 AM Weakest levels.  MBS down more than a quarter from highs and 5 ticks (.16) on the day.  10yr up 3.8bps at 4.636 02:04 PM modest recovery into the noon hour, but falling a bit since then.  MBS down 2 ticks (.06) and  10yr up 2.9bps at 4.627 04:11 PM Calming down in after hours trading.  MBS down only 1 tick (.03) and 10yr yields up 1.2bps at 4.61.