Bonds are off to a much better start today vs yesterday (it wouldn't take much, consider yesterday was the worst day in 2+ months). This morning's producer-level inflation data was also stronger than expected, but fortunately, it's not nearly the same sort of market mover as yesterday's consumer-level data. 10yr yields seem mostly comfortable staging around the 1.68% level and deciding on their next big move after this afternoon's 30yr auction.
The 1.68 level can be thought of as the lower end of a small zone, actually, with the higher end at 1.70. That helps the last 24 hours do a better job of conveying the sense of "staging" mentioned above. Revisionist history? Sure, a bit, but there were two days with relevant bounces closer to 1.70 in April. All that to say that yesterday's move up to 1.70 shouldn't necessarily be seen as "breakout" of the 1.68 level that we have on the MBS Live "Key Levels" meter.
If you prefer (and I frequently do) to tilt the trendlines ever so slightly, the two most recent ceiling bounces line up perfectly.
But let's not get bogged down in assigning too much significance to arbitrarily chosen chart overlays. The general observation is that yields tried to move below 1.53% last week, failed, and are now bouncing higher. As they move higher, we're on the lookout for a ceiling to offer a defensive bounce at some point. It could be around this 1.68-1.70 level, or more weakness could be needed to bring in the buyers. Either way, our odds of gleaning new information go up significantly after this afternoon's 30yr bond auction.