10yr yields had 3 big bounces at 2.80% in March, making it the only obvious candidate for the lower boundary of the recently sideways range.  It was finally broken on Tuesday, leading to question: what now?  While it remains to be seen whether the breakout is partly made of artificial ingredients (things like month-end bond buying and a one-time bout of short-covering--both things that could be cleared up when we see how bonds are trading next week), all we know today is that it's still intact.

What, then, are the levels that would call the breakout into question?  Really, there's only one to watch today, and it's not exactly 2.80%.  That's because after breaking below 2.80%, yields rose to test a technical ceiling, but it happened to be a bit lower at 2.79%.  At times like this, we have to let the "price action" (trading jargon loosely referring to "movement in any given market," even when talking about yield) tell us what's important, and the price action says 2.79% due to several intraday bounces seen in the following chart.

Bond markets will close early today and will be fully closed tomorrow in observance of the Good Friday holiday. When it comes to 3.5-day weekends, it's always good to keep in mind the caution that I've shared over the past few days (and in the first paragraph, to some extent) about "artificial ingredients."  Specifically, bonds might be slightly imbalanced in one direction ahead of the long weekend and that imbalance might reverse course when the following week begins.  The fact that it's month-end only adds to the same caution.  As such, the beginning of next week is still part of the confirmation process of the  2.80% breakout.  The takeaway is that any strong offerings in terms of today's pricing are definitely worth considering.