Even during non-holiday weeks, Mondays tend to run a little light and yesterday was no exception. That said, it did manage the best volume of any session in the past two weeks and it did bring yields to their best levels over the same time.
Today's economic data--International Trade (aka "Trade Deficit")--is less of a market mover than yesterday's ISM data. At the same time of day, there's unofficial economic data in the form of Gallup's Economic Confidence Index as well as Fed-speak from Rosengren. The afternoon brings the start of the week's auction cycle as well as more Fed-speak from Williams.
The absence of any bigger-ticket events relegates the session to taking cues from tradeflows. In short, if Friday's NFP is the grand finale, and Wednesday's ADP/FOMC combo is the big opening act, today will be the point just before the show where the audience gets into position (pun intended).
With that in mind, bond markets might almost be on the bleeding edge of exhibiting some technical signals. To be clear, the signals are certainly there, but the caveat is that signals are often "there" simply due to an absence of volume or participation after a period with no such absence.
In other words, November and the first 3 weeks of December were purposeful in their bond market negativity. With the holidays sapping that purpose, it will naturally have looked like something other than negativity for the past 2 weeks. The dreamer sees this as underlying technical truths signaling a reversal. The cynic sees as inconsequential due to the absence of volume and the realist concludes it doesn't much matter until the week's punchier data has been seen.
Even so, here's a chart for the dreamers (with an obligatory note for realists and cynics):
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