Yesterday's Fed announcement--specifically, Fed Chair Powell's press conference remarks--set bonds up for a potential bounce.  This would come at a critical time considering the prevailing trend for September has/had 10yr yields on a collision course with the highest levels in years.

After a week's worth of sideways trading just over a firm floor of 3.06%, yields managed to sneak all the way down to 3.048% yesterday afternoon.  Today becomes a battle to see whether or not we can remain under 3.06% (or ideally, 3.05%).  While that's currently NOT the case at the moment, it's about where we end the day that matters (at least, it matters more than where we are at 9am).  

In technical terms, momentum has been oversold for a while.  Unfortunately, an oversold condition is never a guarantee of a rally, but it can help set the stage for a bounce.  Think of it this way: all other things being equal, it's easier for bonds to rally just after exiting oversold territory than it would be if they were just exiting overbought territory.

Today will be all about the mid-morning to early afternoon tradeflows.  These are trades that we likely would be seeing with or without economic data (or other fundamental inputs).  With today's key data already out, and no major reaction at 8:30am, the point is only emphasized.