Legit Buying Demand or Position Squaring? "Position squaring" is fancy market jargon that refers to closing previously open positions, but it can also refer to taking opposing positions to square up one's risk exposure.  A "position" is just a bet on rates moving higher or lower.  Traders have been in short positions on rates this week (i.e. betting on rates going higher).  Is the squaring of these positions for the 3-day weekend the only way to explain today's moderate mid-day improvement or were there legitimate sources of inspiration? Econ Data / EventsImport Prices-0.2 vs -0.2 f'cast, -0.1 prev Leading Economic Indicators-0.3 vs -0.3 f'cast, -0.8 prev Market Movement Recap09:00 AM Slightly weaker out of the gate in Asia with additional weakness in Europe, but some resilience heading into domestic hours.  10yr up 2.5bps at 3.886.  MBS down a quarter point. 10:29 AM Bonds bouncing back with 10yr yields unchanged at 3.857.  MBS still slightly weaker, but well off their AM lows. 02:01 PM MBS edging into positive territory in the PM hours with 5.0 coupons up 1 tick (0.03). 10yr yields down 3.5bps at 3.828. 04:03 PM Best levels of the day in after hours trading.  10yr down 4.8bps at 3.815 and MBS up 5 ticks (.16).