And maybe we should also "make way" for tomorrow's refunding announcements as well?  FOMC gets more attention (even from us), but some of today's weakness, especially the steeper yield curve, speaks more to the refunding announcements tomorrow than fear of a fed policy change.  Any way you slice it though, rates are higher where it counts for us.

Given the recent round of tsy auctions, the idea of "concessionary selling," where rate movements reflect more PREPARATION for a market event as opposed to REACTION to one, is fresh on our minds.   That's not to say pre-FOMC concessions are driving the market exclusively, but today's trading is mechanically quite similar to the losses we saw ahead of last week's auction that adhered to strict ranges and inflection points (aka pivot points or internal trendlines).

This 2 day chart doesn't do justice to how perfectly yields touched the top of their long term range, just as they did the last time markets were gearing up for some significant data.  Want more evidence of a technically traded market in the absence of data leading up to significant data?  How about if it also makes a case for a lack of organic weakness in bonds?  speaking rather to the fact that, once again, money is moving to the sidelines ahead of tomorrow's potentially informative FOMC announcement...  Indeed, we can hit both those birds with the following stone...

The S & P is barely in the black at the moment and not nearly to the extent one would expect to see with any normal performance by the stock lever.  In other words, bonds are down and stocks might as well be.  In fact the Dow IS down 30+ points.  One other thing to note on S&P chart would be the 1044.5 (ish) price.  It's been a really reliable internal trendline in that it has given clear indications of both resistance and support over the last two days.  This is more anectodal evidence of technical levels in play for the reasons mentioned above. 

Moving on to potential market movers NOT related to the range-bound selling ahead of tomorrow's data, California's issuance of "Buld America" bonds--even if it's not a primary cause of today's losses--at the very least is not helping the situation for fixed income.  Reasons are several including the notion that the debt is attractively valued to the point of sapping demand elsewhere in the fixed income sector as well as the increased issuance implying an increased funding demand on Treasury which will pay 35% of the interest (...more) .  Any way you slice it, not exactly bond-friendly ahead of tomorrow's refunding announcement in comparable maturity tsy's...

All the weakness aside, play the range until it plays you, and as of now, we're still seeing signs for firm support around the 3.48 to 3.5 yield level in 10yrs.  Moreover, this is likely to continue at the very least until it stops.  Ha!  yes, that is indeed what I meant to say....

The FN is -0-08 at 98-02 yielding 4.199% and the FN 4.5 is trading -0-07 at 100-24 yielding 4.410%. The secondary market current coupon is 4.357%. The Current Coupon is +88/10yr TSY and +70/10yr swap, slightly wider than yesterday afternoon's 3pm marks