The month of March was characterized by 10yr yields repeatedly bouncing at a floor of 2.80% in terms of 10yr yields.  At the time, I argued that--while we were indeed seeing 2018's first correction after the nasty little sell-off in the first 45 days of the year--there wasn't much by way of apparent justification for bonds to improve in a major way from there, given the many headwinds that won't be going away any time soon.

One of the "yeah buts" in my caveat quiver was just the sort of panicked sell-off we saw in equities markets.  To be fair, I thought it would have taken a bit more weakness in stocks than we actually saw in order for bond yields to break below 2.80%.  Apparently, the threat of a break below early February lows in stocks was enough to coax bonds outside March's narrow range.

This week has been all about the evaporation of that threat (for stocks).  S&P futures came within 20 points of early Feb lows on Monday (20 points is nothing special these days) and bounced convincingly.  Tuesday showed the drama was not over, but they bounced again--this time at just slightly higher levels.  With each successive bounce, we could see Treasuries essentially saying "the jig is up."  In other words, without stock market panic, bonds weren't going to be hanging out in their new, sub 2.80% range.

There is no significant data on tap today, and traders may be focusing on positioning for tomorrow's NFP data.  For many traders, it's not about a pure fundamental reaction to NFP, but rather an opportune time of month to make more/bigger trades depending on how the rest of the market looks to be reacting to NFP.