Sometimes, events are such that the typical summertime trading patterns aren't easily seen in terms of trading ranges and volatility.  For instance, in 2015, we had a correction in bond markets following the ECB-QE-inspired low yields earlier in the year collide with the massive China-inspired stock sell-off in August.  In 2013, traders who went on vacation in a defensive stance following the taper tantrum, and illiquid markets quickly ran 10yr yields up to 3.0%.

But in cases where there are no big-picture market movers imparting their spin, bonds tend to drift in a way only seen at this time of year.  Observing it isn't an exact science, but hopefully the following chart helps.  What you're looking for is a general flattening of both the yield range as well as the momentum metrics below.  Everything gets compressed--not necessarily into sideways range, but into flat lines.  This is most noticeable in long-term momentum metrics.

If there's a lesson from the past, it's that we're typically on hold until the 1st full week of September before we see any major departure from the late-August narrowness.  That jives well with the prevailing landscape, considering the ECB announcement is next Thursday and bond markets are very interested to see if any changes in the ECB's bond buying program are discussed.  

This week is more of a wild card.  It COULD see some early indication of life returning to markets, or it could simply continue the summertime vibes.  Either way, it certainly has much more potential than last week considering the fairly robust economic calendar on the last 3 days of the week.  The caveat is that bond markets are most interested in the inflation data that would inform Fed policy.  On that front, we have only Thursday's PCE data.  

In a normal environment, NFP would be the biggest data point of the week on Friday morning, but a generally strong labor market is already baked-in to current trading levels.  The only surprise would be a tremendously weak report, and even that could probably be taken with a grain of salt until and unless it was proven to be something more than an outlier by the next report.

In terms of technical levels, we'll start the week by watching the recent floor at 2.16% in 10yr yields, and a pivot point overhead of 2.22%.  If 2.16% breaks, we'll be within striking distance of 2017's absolute lows just over 2.10%.