It's no mystery at this point that the US bond market has exited its steep, directional, and super friendly move to long-term lows over the past few days.  While yields are starting the day in slightly better shape than yesterday, they're still high enough to keep that negative confirmation intact as we head into the rest of the week's data and events.

Looking at a medium-term chart of 10yr yield candlesticks (hourly), we can see most of the relevant technical considerations.  The dotted teal line highlights that steep/directional/friendly trend I just mentioned, while the yellow lines highlight the broader trends that are converging heading into Friday's NFP.  Meanwhile, the horizontal lines remind us of the pivot points we should be keeping an eye on.  Note the break above 2.47% yesterday followed by numerous overnight bounces today.

The first takeaway is that we'd need to break below 2.47% in order for bonds to be fighting back against recent weakness in any major way.  Beyond that, breaking and holding above 2.50% would set us up for a showdown with 2.55% by the end of the week.  That would roughly coincide with the upper yellow line.

What does it all mean?  Simply put, if 2.55 and the upper yellow line are broken as of Friday mid-day, it would not mean anything good for rates.  Conversely, if yields break below the lower yellow line--and especially if they do so with a move under 2.47%--it means something much better, or at least much less troubling.

So what will it be that moves markets?  Yesterday we talked about Chinese manufacturing data in the overnight session, and while there really wasn't much else to point to at the time, here's how bonds have been responding overall to Chinese market movements:

In contrast, here's how Treasuries interact with European bonds:

Don't mistake correlation for causality here...  It's not as if German Bunds are dictating US bond volatility.  That said, both tend to interact with one another, taking and giving cues depending on the day.  This week, we'd be safer to assume it's Treasuries in the driver's seat in light of the big econ data schedule.  Bottom line: Treasuries are likely going to place the greatest emphasis on any big beats/misses in the econ data--especially ISM services tomorrow and NFP Friday.