Believe it or not, any given month stands a better than average chance to convey some sort of theme for bond trading.  In other words, there tends to be a discernible bias higher, lower, or sideways.  It's uncommon to see all 3 biases in the same month.   August and September were quite clear in this regard.   August was good.  September was bad.

Now that September is over, we're well within our rights to wonder if October will keep the bad times rolling or offer reprieve.  Given that yields had been very near long-term highs and that momentum indicators suggested a potentially friendly bounce, it's fair to hope for a friendly October.  Unfortunately, if the first few hours of the month are any indication, we may find life isn't always fair.

The saving grace so far is that the weakness hasn't resulted in a break above the 3.06-3.095% range that contained most of last 8 trading days.  In other words, if we're forced to begin October with weakness, at least that weakness hasn't quickly broken the ceilings that had been important over the last few weeks.

If bonds are to make progress, they'll likely need the help of this week's economic data.  Last month's iteration of this week's data was arguably the key factor in September's rate spike.  Supporting actors will be on stage off and on from today through Thursday.  Chief among these are the national ISM reports (Mon/Wed) and the big jobs report on Friday.

In general, as long as we can hold below 3.09-3.10%-ish, hope remains alive.  Breaking below 3.05-3.06% would be a good start to a deeper rally and a sustained move below 3.015% would be confirmation of the same.  Whichever trend seems to be taking shape in the first 4 days of the week, it's the average hourly earnings component of this Friday's jobs report that can make or break it.