The end of November has been true to form with several examples of directional movement despite an absence of motivation.  Last Friday was perhaps the most notable with serendipitous weakness erasing a week's worth of modest improvement. The counterpoint is that a majority of that improvement could also be seen as a product of the holiday week trading conditions. Yields popped just a bit higher to start the new week but have been rallying throughout the overnight session and into US trading hours.

Even amid the weaker moments, the late November range was never threatened.  If anything, it was the excess paradoxical strength last Tuesday and Wednesday that stretched the range in a good way.  Viewed in that context, Friday's weakness brought yields back to what we view as the logical sideways range until bigger-ticket data has its say.

20231127 open.png

To be fair to the bond bulls, one could also easily make a case for a bullish trend channel in yields.

20231127 open2.png

Bulls might also keep in mind the market's slightly better than average tendency to cool off after big reversals somewhere around the 6 month (126 day) moving average.

20231127 open23.png

Without anything too interesting on the calendar, today's focus is on the condensed Treasury auction cycles with both 2s and 5s at 11:30am and 1pm ET respectively.