• Bigger picture consolidation continues but no bounce toward higher rates yet
• Quiet overnight session; bonds rally steadily through domestic close
• oil made a big move lower, but bonds didn't seem to care
• corporate issuance was a hurdle; bonds cleared it easily

In the context of the consolidation in bond markets in 2016 (aka the big triangle connecting the lower highs and higher lows in rates), we look to be due for a bounce toward higher rates.  Although we're still at risk of that happening, it didn't happen today.  In fact, rates moved back down toward the lower edge of the proverbial triangle after looking like they were headed in the opposite direction on Friday.

There was ample coverage of today's oil price declines in the news and financial circles today.  This isn't a bad or illogical thing, given the correlation between bonds and oil prices these past few years, but it was unwarranted today.  Bonds were on their own mission, and it began before the day's oil price drama.  If anything deserves credit for leading rates lower, it's European markets in the overnight session.

As the caption in the chart says, even with the more abrupt move lower in European bond markets, Treasuries were barely stirred.  MBS were stirred even less.  We ended the day right in the middle of Friday's trading range, grateful to be in better shape than Friday's weakest levels, but still at risk of seeing a move back to the other side of the big-picture triangle.