Have you heard the one about Ferrari moving the bond market?  Well, now you have.  In an apparent mystery move before the start of the domestic session, stocks and bond yields dropped in unison.  It wasn't the biggest move ever, but it was abrupt enough to suggest discrete motivation.  The only suspect at the scene of the crime?  Ferrari earnings! 

What's the takeaway?  Simply put: earnings season is in full swing.  Stock/bond correlation has increased, and could continue to be a factor for small-scale volatility in a week where the dominant focus remains on Friday's jobs report.

What about large-scale volatility?  It depends on your definition, but if we assume the prevailing range boundaries remain intact, that conversation wouldn't open up until yields move under 1.53 or over 1.76.

With bonds reacting logically to big economic reports on several recent occasions (for the first time in a long time), our focus is logically increased on the rest of the week's data.  Friday is still the headliner with the big jobs report, but tomorrow is no slouch with ADP and ISM Services.  It's also the biggest day for corporate earnings this quarter.  Bottom line, there's more movement potential for multiple reasons.  

As far as the strategy approach, if you're playing the range, you should be getting more defensive (i.e. lock-biased and/or increasingly ready to lock) the closer yields get to lower range boundaries.  Failure to break those boundaries (i.e. bonds bounce at or near 1.53) is your cue to pull the trigger.