Monday and Tuesday were a bit nerve-racking as it looked like yields might break back above the pre-Mexico-tariff-threat gap in the 10yr yield chart. But bonds bounced well before that happened and have been trending calmly lower ever since. In fact, it doesn’t seem to have mattered what the market movers were on any given day. The trend has been the trend, even though we have seem some token responses to the more obvious market movers.
Today brought the most recent example with the 30yr bond auction at 1pm. It managed to come in stronger than expected without the need for bonds to do any concessionary selling in advance (not to mention the generally low rates in the bigger picture). Such things only validate the market’s decision, desire, and right to be trading in the current range.
Despite the linear streak of calm improvement over the past 2.5 days, we certainly aren’t seeing an aggressive attempt (or “any” attempt for that matter) to break back below recent low yields. That builds the sense that rates are consolidating–biding their time before encountering market moving forces big enough to set off the next wave of momentum. If we haven’t seen those in next week’s Fed announcement, it won’t be far behind.