Friday was a somewhat glorious day for bond markets, but perhaps only because Thursday was so terrible.  Both of those sessions were completely driven by trade-related updates as the US and China worked toward putting out what some might call a lackluster confirmation of the "phase 1" trade deal.  (I say "lackluster" because it isn't signed yet, even if it ultimately will be, and because there are critical details that remain to be hammered out.)

Friday's trading made Thursday look like a massive, negative head-fake. But now today's trading makes Friday look like the unwelcome visitor to an otherwise bond-bearish party!  Weakness was in place right from the start of the overnight session, but losses leveled off and held sideways throughout European hours.

As domestic trading got underway, US traders joined the selling bandwagon.  Notably, the pressure showed little concern for any of the morning's economic data, even though it easily could have been used to justify bond sales.  Volume was a mere shadow of Friday's and liquidity was light.  This suggests the "2nd half of December" trading environment is beginning to take shape (i.e. more random movement and more volatility for any given set of inputs).  

Ultimately, today's yields ended in far better shape than Thursday's (1.87+ vs 1.91+), and we're still well off November's highs which were closer to 2.0%.  But the risk is that the December trend continues through the end of the month and re-challenges the late 2019 highs.