• Calm Monday, for the most part
• Bonds probably took cues from oil prices
• Bonds bounced when oil bounced (around noon)
• Net effect was modest gains with Fannie 3.0s up 5 ticks at 101-17

In typical Monday fashion, bond markets didn't offer too much excitement.  Data was absent.  Volumes were light, and volatility was mild.  Even then, if anything constituted a 'volatile' surprise today, it was that yields had fallen as much as they had by noon.  

Before that, the overnight session began completely uneventfully, with 10yr yields chopping sideways around the same range seen at the end of Friday.  The only real external guidance came in the form of falling oil prices.  Oil's inspiration ostensibly came from headlines regarding Iranian output increases and OPEC surplus forecasting.  Indeed, these stories seem well-enough connected to oil price declines to conclude they were meaningful, even if only as a cue.

Less clear is whether bond markets were taking their cues from falling oil prices.  While we can't observe the sort of unequivocal cause and effect we might like, it is true that yields and oil prices were generally moving higher and lower at the same times for most of the day.  

Keep in mind that the week gets serious tonight with the Bank of Japan announcement and Retail Sales data in the morning.