After confirming a breakout from the "consolidation range" (the converging lines tracing the lower highs and higher lows over the past 3 months) yesterday, bonds move on to fight for the consolation prize--a consolidation consolation, if you will.

The next type of range boundary after breaking a sloped ceiling is a simple, flat ceiling marked by recent highs and/or historically significant trading levels.  In the current case, 2.52 and 2.55 have been relevant for 10yr yields.  

Unfortunately, we're starting the day OVER 2.55 already (this may lead to a discussion of the next ceiling at 2.64 by and by, but we'll cross that unhappy bridge if we're forced to).  For now, there's a fighting chance to hold one of these ceilings, despite the fairly universally negative technical momentum readings.

2017-3-9 open2

Just by way of checking in with the main underlying motivation for all the recent weakness, here's an updated OIS chart showing that Fed hike expectations are still on a 100% trajectory.

2017-3-9 open

This morning's key event will be Draghi's ECB press conference, which begins now.  The afternoon's 30yr bond auction could serve as another focal point for volatility at 1pm.