We're now far enough into the final pre-NFP day of the week to safely observe yet another instance of range-bound zigging and zagging.  In other words, bond markets aren't really doing much apart from playing pinball between range boundaries.  If we wanted to chart that, it would look something like this:

When markets are engaged in this sort of noncommittal nonsense, it really gets in the way of meaningful analysis.  All we can really do is say that there's a narrow range, and there's a good enough chance that it's in anticipation of tomorrow's NFP data.  Of course, that could flop as well, and then we'd really be in a pickle, considering the monotony-breaking event would then become the Fed Announcement on Sep 17. 

As for today's particulars, the morning rally was all Draghi (European Central Bank president).  He left the door open for more QE beyond the Sept 2016 end date--a fairly toothless gesture, considering no one expects that the date is etched in stone for better or worse anyway.  More interesting was his change in tone regarding growth and deflation.  On a quantitative note, the ECB did raise the limit on the percentage of any single issuance they could buy (from 25 to 33). 

US bond markets didn't respond nearly as well to the European motivation, though they did bounce around yesterday's best levels while Europe continued to outperform.  Rising oil and stock prices put pressure back on domestic bonds at the NYSE open, making for the quick move back to weaker levels.  After that 'zig,' we've already 'zagged' back toward better levels.  I could make up several reasons that would sound convincing, but I think the zigging and zagging is its own reason for existence at this point.