You've heard of "innocent until proven guilty."  This week of trading in bond markets has been "flat and boring until proven volatile."  For many, it's the first full week of summer.  For others, it's the week where their kids finished school.  And for everyone, it's a week without much by way of significant economic data that lies just before a "month/quarter-end" trading week.  To say that traders have been increasingly tuned out is an understatement.

Today epitomizes that "tuning out" theme, not only because it's the last day of the week described above, but also because yields are starting out in the same old range that's been dominating since Fed day (last Wednesday).  In other words, it looked potentially boring on paper, and it continues to be boring when we see how it's actually being traded.

This can all change rather quickly, of course.  After all, in financial markets, there are no rules that say something has to stay flat just because it looks like it probably will.  The better way to approach today is to simply use the "probably" as a baseline and keep an eye out for any threat to that baseline.

In terms of 10yr yields, a "threat" would look like a break below 2.143 (my kind of threat!) or above 2.18.  Outside those boundaries, we'd be looking at 2.19-2.22 on the high end and 2.13-2.11 on the low end.