Bond traders took a break from their newfound hobby of the past 5 business days: relentlessly selling bonds.  Maybe they want to branch out and try new things.  Maybe they were just a little tired of all the selling.  Or maybe they had hit their pre-ECB selling goals just a bit early.

Tomorrow's European Central Bank (ECB) announcement is definitely worth considering as a potential flashpoint.  With heavy expectations for significant stimulus and rate cut overtures on multiple occasions since the last meeting, the sudden ramp up in ECB-related doubts (i.e. will they cut as much as we thought?  Will they announce any new bond buying)  may indeed have the bond market on edge.  To whatever extent that's the case, we'll know it tomorrow, and today's sideways grind would make even more sense. To whatever extent that's not the case, we get to do the same thing all over again next week with the Fed.  

If there was something to be gleaned from the lack of movement in Treasuries today, I'd argue that it was mildly bearish.  Yes, it's great to see yields avoid making another big jump higher, but European bond trading and a reasonably average 10yr Treasury auction both provided enough justification for Treasuries to rally a bit if they had any inclination to do so.  Instead, Treasuries seemed almost careful to avoid rallying back below initial overnight lows at 1.71%.  They ended the day at 1.745% while Fannie 3.0 MBS managed to gain nearly an eighth of a point.