Bond markets were weaker in the overnight session, following Yellen's weird speech after the close yesterday.  I wouldn't have thought Yellen would depart so forcefully from last week's theses, but truth is stranger than fiction.  Somehow, we've gone from global growth concerns posing domestic inflation risks to "likely to hike in 2015" and the general thesis sounding more like "everything's gonna turn out fine."  It was--and still is--quite odd. 

Markets don't believe Yellen & Co. either.  Fed funds futures show less than a 40% chance of a 2015 rate hike.  Nonetheless, bonds reacted poorly at first.  The interesting thing is that any response to rate-hike prospects has now been completely reversed.  In other words, shorter term yields (which are more closely linked to the Fed Funds Rate) were the worse performers after Yellen.  Over the course of the overnight session, they steadily outperformed longer-term yields. 

All of the above indicates the weakness we're currently seeing is less to do with Yellen, and more to do with 'something else.'  As far as what that "something" might be, we could look at something as specific as the overnight strength in equities and European markets.  Or we could look at something as general as a simple attempt to hold the range amid ongoing uncertainty.