Frustrating day for market watchers today as bonds suffered moderate losses despite a complete absence of any compelling market movers.  These sorts of things happen from time to time, but they tend to happen more readily as we approach the least liquid times of year with the lowest overall market participation.  The 2nd half of December is best example of of this phenomenon.  

Ideally, traders would all agree to engage in an orderly march toward the center of the prevailing range, and with lower and lower volatility as 2019 winds down.  Indeed, that happens quite often at the end of any given year.  But it depends on an absence of a few big traders blasting an unprepared market with an unexpectedly large glut of buying/selling pressure.  This happened on several occasions today, and the low liquidity means those bigger trades have more power than normal to move the needle.

10yr yields were fairly close to unchanged overnight, but a series of big trades, first at 9:30am and then just before 11am, pushed yields more than 4bps higher.  Those were really the only 2 noticeable moves of the day and everything has been sideways since then.  MBS experienced the drama in the form of a quarter point loss.  

From a technical standpoint, this brings bonds right to the edge of their weaker boundaries (close to them anyway), but still safely below levels that would suggest a breakout from the higher overhead ceilings (1.954% or 1.973% depending on your preference for more recent highs or those seen back in November).