Trade headlines rocked markets yesterday, making for the biggest single-day bond rally since early August--even after the gains moderated in the afternoon.  The pace of the move was perhaps a bit surprising given the recent evidence of desensitization to every little update on the US/China trade deal.  Still, the move could be justified by the specific nature of the news (i.e. it wasn't just another "getting closer to a deal" headline). 

Heading into today's session, however, we seem to be right back where we started, with one of those generic "getting closer" headlines apparently responsible for the only noticeable shift in the overnight session.  The spike on the following chart followed a tweet from a bloomberg reporter saying that the deal is still progressing despite yesterday's news.  Here's the story.

20191204 open

Econ data will have it's chance to move markets again today with the only top tier report between now and Friday's NFP: the 10am release of ISM non-manufacturing.  It's expected to hold relatively steady at 54.5 versus last month's 54.7.  Whereas bonds aren't much interested in payroll count updates (i.e. almost no response to ADP Employment this morning), ISM data has been a much more reliable market mover.