Yesterday, the first thought we shared about the previous sessions was: "bond markets traded well on Monday."  What a difference a day makes...  Bond markets did anything but trade well on Tuesday.  In fact, we're not exactly sure what they did.  Any movement, momentum and/or signs of life really, were seen in the overnight hours--specifically during the European session or before.  Seriously...  Here's the past 3 days of 10yr yields during the domestic session.  Just stare at it:

If you find yourself wondering whether or not 10yr yields just spent the day trading WELL inside a 2bp range and 11bps and 9bps in the 2 previous sessions, yeah... they did that.  Here's yesterday morning's chart which showed the hoped-for support just under 2.04 and the "hope to break" resistance in the mid 1.95's.

Here's how it evolved during yesterday's session:

Ah yes... the good old Whisky Tango Foxtrot technical formation...  What in the world is going on here?  In truth, we don't have enough information to decide what to make of this,  and paradoxically, that may be the conclusion as to "what's going on."  After rising in the European hours, Treasury yields got flat and volume went out the door (relative to recent volume).  It looks like there's some sort of central tendency around 2.0 with boundaries in the same place they have been for over a week.  Treasuries are waiting for "a reason" to go in one direction or the other. 

We don't think there's a consensus on where we go next and we don't see an event in the day ahead to serve as a likely suspect for motivating a break in either direction.  On a positive note, simply seeing the willingness to entertain something other than a relentless trend higher in yield is an improvement from the past several months.  On a negative note, similar patterns typically resolve by initially breaking higher in yield, though many of them return to lower yields in short order (this can be several days or several weeks depending on the historical example).  Whatever the case, Treasuries are in "wait and see" mode, on guard for any unscheduled, but significant market motivations.  Incidentally, "unscheduled" is pretty much a requirement for any significant market movers today as there are no significant scheduled pieces of data.