Drama is fueling a surprisingly strong 2014 rally in US bond markets.  Most of that drama has to do with the European economy and geopolitical risks outside the US, but Treasuries and MBS would rather swim with the tide of global fixed-income demand.  Thus we find ourselves "rallying until we're no longer rallying."

Last week brought news that Ukrainian forces had blown up part of a Russian "armored column"--whatever that is.  Early newswires for Monday now suggest a potential deescalation.  Actually, see if you can figure out what Russia's Foreign Ministry is saying here (these are actual words in the newswire from Reuters, split into bullet points in order to help us divide and conquer the dizzying logic.

• Agreement reached
• For forther talks
• Which could produce proposals
• for Ukraine crisis de-escalation.

So to recap, at least we've agreed to talk about possibly proposing a plan to deescalate.  What commitment!  What utterly precise and forceful action!  (And we wonder why this conflict continue to fuel market uncertainty... or do we?).

Last week's rally was so decent that any further improvements would require another similarly momentous day of headlines.  Bond yields are pushed right up against the lower edge of their recent trend.  Any major suggestions to move in the other direction would be well-met both by bears who think it's finally time for rates to go higher, as well as bulls who wouldn't mind giving the rally a chance to recharge.