The bond market--widely expected to have been launching yields up and over 2% in 2020--is instead in the process of testing it's best levels since early December.  This has been made possible by a combination of unexpected bond-friendly factors, or so it would seem.  The US/Iran flare-up led the charge early in the month, but most recently it's the Coronavirus outbreak in China.

Despite those "risk-off" events, stocks have surged to all-time highs throughout the month even as bond yields have fallen.  In other words, it's not a given that those events are entirely to blame for January's decline in yields.  This could just be the curve ball that bonds are throwing to start the year--one of those situations where markets were so convinced bonds should do one thing that they were paradoxically forced to do the other (a possibility I've been discussing since mid December).

Either way, yields will spend today attempting to break out of the strictest version of their current consolidation range (white lines below).  Doing so would imply a test of the 1.74% pivot point--a level they haven't been able to break so far this morning.  Coronavirus headlines and the reaction to the European Central Bank's (ECB's) press conference  may set the tone early, but again, bonds have already shown us they're willing to go their own way regardless of event-based implications.

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