I was pretty happy to have made it through yesterday without seeing or writing any "Ides of March" headlines.  I can't ever quite remember what the word "banal" means, but I'm pretty sure that it covers "Ides of March" headlines as well as things like references to "green" in bond markets on or around St. Patrick's Day.  Turns out we may not need to worry about much green heading into St Paddy's.  

That's unfortunate--almost as much as something that ALMOST happened with today's headlines.  I came very close to saying something like "beware the day after the Ides of March."  So while these first 2 paragraphs have been tedious, at least it wasn't another banal headline.  Let's move on.

Unless today is your first day reading this commentary, you've hopefully gleaned a certain amount of skepticism about bonds' ability to convincingly break below the low yields seen in early March.  In simpler terms, 10yr yields bounced hard at 2.80% back then and that's where they bottomed out 2 days ago as well.

Yesterday was an interesting trading session in that yields didn't spike quickly higher in the same way they did in early March.  Did this mean we had a better chance of breaking back below 2.80% this time around?  Sure, but "better" is a relative term.  Better than in early March?  I wouldn't argue that, but I remain healthfully skeptical about the bond market's ability to stage any major rallies in an environment where we can't avoid a steady increase in government bond issuance and where the Fed certainly hasn't seen the sort of economic data that would suggest an adjustment to its policy path.

Bottom line, while I like the short-term opportunities presented by the recent sideways consolidation, I'd still advocate a healthy skepticism about any big, sustained rallies.  If you want to put a number on it, bonds are already doing it for us.  They're telling us that big, sustained rallies are decreasingly likely the closer we come to breaking 2.80%.  Moreover, they're suggesting that reaching 2.80% is grounds for some selling pressure.