With a dearth of economic data on the calendar, bond traders were set to take cues from other traders, technical levels, and perhaps a big-ticket headline or two.  Today begins with just such headlines.  As has been the case for several market moving headlines of late, today's center on North Korea.  

North Korea has tested nukes within its borders.  It's tested ICBM's outside its borders, but it has yet to test ICBM's with nukes outside its borders--something it threatened to do overnight. That's the big shift this time around, and the key reason that these headlines were worth a market reaction whereas the last round of "test" headlines fell on deaf ears.  The overnight reaction was clearly "risk-off" (stocks, Yen, bond yields all moved lower).

But if we step away from the trading screens by just a few steps, we see that this volatility is transpiring inside a narrow range.  Specifically, 10yr yields remain inside yesterday's trading range.  The most immediate battle is between 2.245 (which saw a big bounce as a floor yesterday) and 2.28% (yesterday's ceiling and generally an important technical level).  The rightmost candlestick on the following chart is today's overnight trading range.