Modest weakness on Monday meant the door was still open for bonds to challenge the lower boundary of the higher rate range seen last week.  Today's trading is quickly changing the narrative.  What began as nagging weakness in the overnight session has blossomed into more aggressive selling following the the ISM Services data.  Suddenly we find ourselves in a better position to consider an attack on the ceiling of the recent range as opposed to the floor.

While there's no question that the ISM data is contributing to today's weakness, it doesn't deserve all of the credit/blame.  In fact, stocks and bond yields had already begun moving higher before the data and, although volume was highest right at 10am, it was definitely picking up before that.

The takeaway is that bonds aren't necessarily at the whim of economic reports and that a portion of this week's weakness is embedded (or driven by other factors).  Among those other factors, the ongoing decline in daily covid case counts certainly isn't helping the bond market.