After Wednesday's respectable rally, we may as well give up the search for too much discrete causality in the bond market.  While we can definitely observe connections in the short term to individual events, technicals and tradeflows have been just as relevant and they tend to play out less predictably in terms of timing and ground-covered. 

10yr yields successfully defended against a break above a ceiling at 1.424 and moved fairly quickly back to the next technical zone underfoot.  This could be seen as anything from 1.34 to 1.38, but we've been using 1.36 in our "key levels" list.  

As of this morning, bonds were also able to make a case for new breakouts--both of the short-term uptrend (yellow lines) and of 1.36.  In so doing, they've moved to test the pivot point at 1.30, but don't seem too keen on breaking it so far.  Here's a closer look:

For now, we're seeing this as another step in a consolidative process as opposed to evidence of new rally momentum.  Sideways, consolidative trends make good sense between now and whenever the Fed feels it has enough information to make a tapering decision.  We may get a few more tidbits to inform that outlook in Powell's 2nd round of congressional testimony today.