Today was decidedly negative for bond markets.  10yr yields found no solace in "the gap" from 2.26 to 2.28 and instead moved right through to 2.30.  There are other potentially supportive ceilings overhead, but we would have liked to have seen stronger support at the gap in order to maintain a more bullish stance.

In simpler terms, it's OK that rates have been moving higher.  It's a normal aftershock following big moves like that seen last Wednesday.  It would have been even more OK if they'd stopped moving higher yesterday.  The fact that they did not suggests a defensive approach heading into next week's FOMC Announcement and Treasury auction cycle. 

On a positive note, we did get some good information about current trading motivations.  US bond markets opted to follow European bond markets as opposed to stocks.  That wasn't clear at first because everything was moving together, but then at the noon hour, Treasuries continued weakening even as stocks pulled back.  A quick look to the final hour of European bond market trading revealed a much better correlation.  It might not be the whole story, but it's definitely a story.