In late July, bonds rode a wave of momentum toward lower yields with many traders targeting the 1.25% zone in 10yr Treasuries. That floor was broken on Monday July 19th.  The rally extended to 1.128% before bouncing moderately.  Another attempt was made in the week before last, but 1.128% held firm again.  Heading into last week's bond market supply, yields spiked, but bounced firmly at the 1.37/1.38% technical level. 

These juxtaposed bounces make decent sense.  After 4 months of rallying and a break of the 1.25% target, it was no surprise to see rally momentum stall out.  It was just as logical to see sellers shy away from a more aggressive move higher given the recently lackluster econ data, increasing covid concerns, and the passing of a heavy dose of supply. 

We're now in a period of indecision, waiting for clarity from Powell next week and covid in general. The center of the range is 1.25% until further notice (incidentally, the mid-point of the recent ceiling/floor bounces).  Bonds aren't looking eager to stray too far from that mid-point so far today.