Heading into 3-day weekends, it's not uncommon for investors to move to the sidelines by selling some of their holdings with the intention of getting back into the market the following week. Right at the start of this week, we buyers return, with little to explain the move apart from that "sidelines" metaphor.

As the day progressed, the usual cues began to have more of their usual effect.  Specifically, stocks topped out just after 11am.  As they fell somewhat precipitously, bond markets found their inspiration to modestly extent the rally.  Relatively speaking, stocks moved quite a bit while bonds were generally flat after the morning gains.

The positive takeaway (other than the obvious green on the screen) is the fact that bonds accomplished the gains in the presence of a growing slate of corporate issuance.  That means corporations are expected to issue new debt this week--a process that was clearly begun today.  Corporate issuance tends to put pressure on Treasuries and--to a lesser extent--MBS. 

The pessimistic approach would be to focus on the technical levels we discussed this morning.  Simply put, there's resistance around current trading levels.  For instance, in terms of 10yr yields, 2.04% is the near-term floor.  The fact that we hit that overnight and were unable to break it throughout the domestic session is somewhat discouraging.