Well... at least things are interesting.  The winter holidays are always a challenge from an analytical and market-watching standpoint.  It seems like a vast oversimplification (indeed, I didn't believe it was true when someone tried to educate me years ago), but "new year momentum" can really be the primary motivation for bond markets.  And it really can be something we just have to wait for until the 2nd week of January.  

In the case of 2018, the 2nd week of January suggested the New Year momentum was toward higher rates.  As we wrap up the 3rd week of of January, that continues to be the case.  It's really that simple.  There's no need to dissect causality on smaller scales.

But if you want smaller scale causality, we can talk about a fairly massive amount of corporate debt issuance this January.  Today was especially big and active.  (Read our primer on how corporate issuance affects rates HERE).  

Economic data was fairly mixed and generally a non-issue for bond markets.  If anything, the inflation component of the Philly Fed Index made for a bit of additional weakness at 8:30am.  Inflation is a key consideration at the moment, to be sure, but big intraday reactions seem to be reserved mainly for the monthly release of the CPI data.  Even this afternoon's stellar demand for 10yr Treasury Inflation-Protected Securities didn't rock the boat.

From a technical standpoint, the ceiling we were watching at 2.60% was broken today.  We're now actively testing the 2.62-2.64 zone seen in late 2016 and again in March 2017.  Bond buyers are interested in buying some time soon, but no one wants to be the first prairie dog to stick their head up at a time like this.