The week begins with global financial markets once again defending against coronavirus risks.  Case counts were flat in April and most of May.  The implications were even better considering the effect of increased testing.  But rather than a gradual decline that many had hoped for, we're instead seeing a lift-off from the recently flat numbers.  While some of that certainly has to do with the gradual reopening of the economy, the trend is nonetheless a concern.  Several states (CA, FL, TX, NC, off the top of my head) have seen a significant jump in cases and are near their highest daily totals.  If you prefer a more global assessment (it's a global economy after all), this is pretty simple:

The corresponding result in financial markets has been fairly simple as well.  After a scary jump toward higher yields in Treasuries (and an impressive break toward recent highs in stocks), markets have reversed course with stocks sliding and bonds returning easily into the previous range. The baseline scenario is still for a gradual uptrend in rates that traces gradual improvement in the coronavirus outlook, but as long as that outlook is doing things like it's doing right now (i.e. calling gradual improvement into question), rates can remain low.

This week's scheduled data highlights include Retail Sales for May (tomorrow morning) and the Philly Fed Business Index on Thursday.  10yr yields are once again able to watch overhead ceilings at .74 and .79 for any signs of trouble.  UMBS 2.0 coupons could lose half a point without any negative implication for the trend in the mortgage market.  Granted, that would imply slightly higher rates than we're going to see this morning, but the broader trend would still be sideways near all-time lows.