In the week just past, bonds were preoccupied with central bank communications.  Wednesday's Fed announcement was going to be the only game in town, but Draghi's speech at the SINTRA conference (which promised rate cuts and additional easing) set a positive tone for bonds on Tuesday morning.  The Fed struck a similar tone.  While they didn't promise more easing, they said enough to convince markets that they would play ball with the recent shift in rate cut expectations as long as the economy warranted it.

In the week ahead, we'll be counting down the days until we get to the data most likely to suggest whether or not the economy warrants Fed rate cuts!  Specifically, the first week of July has been and continues to be of the utmost importance as it not only contains several of the most important monthly economic reports, but also a chance to confirm or reject the last jobs report (exceptionally weak).

In the bigger picture, strong momentum in bonds is potentially shifting out of 'overbought' territory for the first time in nearly a month in terms of slow stochastics (a longer-term momentum oscillator in green/teal at the bottom of the following charts).  There have been head-fakes (instances where it looks like momentum is shifting in a bad way only for bonds to continue to rally) in the past, but the current situation is tremendously uncommon.  

The only time (in the past 20+ years, anyway) a head-fake has occurred after nearly a month in overbought territory was in May/June 2003.  That afforded the bond market a few more days of improvement before a major wave of selling set in.