For more reasons than meet the eye, the 3-day Labor Day weekend coming up is the most relevant near term consideration for markets.  There are other three day weekends out there, and they're notorious for luring market participants out the door earlier than normal--by at least half a day in the mildest cases.  This one is no different in that regard, and as such, we wouldn't expect logical cause and effect to be in force in the PM hours.

Labor Day weekend is unique in its symbolic and literal importance as a dividing line between summer and fall--between slow time and go time.  Over the past several years, summers haven't had quite the same "doldrumy" feel as the quintessential financial market example.  But even the gravitas of summertime events (Europe in 2010-12, debt ceiling and Fed verbiage change in 2011) made for relatively more activity, there remained a distinct difference between pre and post-labor day bond markets. 

This is tough to quantify, but looking at the chart below with labor day marked by horizontal lines, one could conclude that it has at least been a time to pause for consideration.  Even in 2011 when the post-Labor swings were bigger, they arrived quickly and "canceled each other out," so to speak.  Bottom line, in EVERY example, yields were at pre-Labor-Day levels 3-4 months later.

Then again, we haven't been in this much of a position to consider the end of the 30yr rally in interest rates, so there's no guarantee history will repeat itself.  But for those who prefer to stay optimistic, there you go.

The other thing to consider is that even if yields continue in their current trend toward higher rates, there is plenty of room for the aforementioned Labor Day phenomenon to hold true without violating the longer-term trend.

Today's data includes Personal Consumption Expenditures (Incomes and Outlays report) at 8:30am--not the major market mover it used to be.  Chicago PMI packs a bit more punch at 9:45am (though can start markets moving at 9:42am as it's released early to subscribers), followed by Consumer Sentiment at 9:55am.  This will be the busiest time of day and with no scheduled Fed buying in Treasuries, it will mark the end of the day for many bond market participants.  That doesn't really mean anything in terms of what direction we go as much as it suggests taking any pronounced moves with a grain of salt.  Then again, that's been true all week, and won't officially change until next Friday.