This week continues to be all about Tuesday for bond markets.  That was the day with the rather violent, inexplicable sell-off that took yields from 2.25 to 2.34 approximately.  Even with econ data, a Treasury auction and the Fed announcement yesterday, yields remained well inside Tuesday's range.  Today was narrower still--especially during domestic hours where 10yr yields held between 2.3 and 2.33% as opposed to yesterday's 2.28-2.34% domestic session range.

These "inside days," as they're called, speak either to a lack of conviction or simply to a consolidation.  Either way, we're waiting for a break outside Tuesday's levels before drawing any conclusions.  Arguments can be made for both camps, but caution is warranted considering the big surges in volume have accompanied movement toward higher rates over the past 3 days.  

Today, specifically, there was little by way of reaction to the stronger Durable Goods data.  That's net-positive for bonds, but there was a counterpoint as bonds failed to react to a big selling-spree in stocks heading into the 1pm hour.  It's not that we should expect bonds to rejoice every time stocks move lower, but this was a big, broad-based move that typically would have seen bonds come along for the "risk-off" ride unless bonds had something else on their minds.