Today was the most active trading day of the week--something that looked destined to be the case considering markets began gyrating right at the start of the Asian session.  The initial volatility came in response to the announcement of another $200 bln in US Tariffs on Chinese goods. Logically, stocks lost ground and bonds rallied.

After hitting the apex of that move before Europe even got out of bed, stocks and rates began inching higher as if to say "we've done this dance before and we're not going to freak out as much this time."  That sentiment was rewarded by stronger data on wholesale inflation (PPI at 8:30am).  Bonds weakened a bit more and stocks continued to rally.  

The next key consideration for bonds was the 1pm 10yr Treasury auction, which went well, but only after 10's had weakened enough to make prices enticing for bidders.  The strong results helped yields hold under the day's previous ceiling.  In the afternoon, there were two quick spats of volatility--apparently related to tradeflows and positioning.  A few analysts mentioned a short-squeeze just after the 2pm mini-rally, but importantly, all of it occurred within the confines of the prevailing (and narrow) sideways range.