"As with any geopolitical situation affecting markets,
we'll only know the corner has been turned in hindsight.  Until then, it's a wild card that's thus far been working in favor of bond markets, but we should remember that sets us up to give something back when tensions begin to subside." That was the last part of Monday morning's Week Ahead and 2 short days later we're faced with the challenge of looking back yesterday's potentially turned corner, asking: "was that it?"

While we can't know if another flare up of geopolitical tensions will reignite bond market positivity, we can readily observe how well the torch might be passed to the upcoming employment data.  After all the title of that commentary was "Jobs Report Collides with Geopolitical Risk."

The latter ended it's first cycle of market impact yesterday with a large, determined move lower in price and higher in yield for bond markets.  In terms of Bollinger Bands, which are a useful technical overlay for keeping track of how aggressively a security is improving or weakening, Treasuries had a bit of a gap to close by the end of February (see it in the chart below).  Monday helped close that gap and Tuesday made clear the choice to "bounce or break."  It was so clear, in fact, that 10's moved most of the way back to the more neutral mid-point, where they've spent quite a bit of time recently, waiting out the weather.

That neutral perch is a good place from which to digest today's economic data, which includes ADP Employment at 8:15am and ISM Non-Manufacturing (aka "ISM Services") at 10am.  Both are strong potential market movers and interestingly enough, both follow a fairly similar path characterized by generally sideways trends after coming out of the recession.