Tuesday was going poorly for bonds until Trump Tweets (instructing his representatives to stop negotiating a stimulus bill) sent markets into a tailspin.  Stocks tanked and bonds rallied significantly, thus throwing a bit of a wrench into the prevailing mechanics of cut and dried negative momentum.  

In other words, bonds had recently suffered 2 negative technical breakouts (10yr yields moving above important ceilings).  The first was a small scale version that merely resolved a narrow consolidation last week (yellow lines in the chart below).  The second breakout hit hard at the beginning of the current week, easily breaking the 0.72% ceiling that had been intact since August.  

The reversal/clarification of the tweets was problematic due to its timing.  Bonds had JUST broken a key technical ceiling and now possibly had a reason to move right back below it.  That meant yesterday had the potential to look like another "false start," much like the one seen in August, provided bonds could continue rallying just a bit more today.

But the overnight news quickly removed the wrench!  Hours after the initial tweets, Trump clarified that he'd gladly sign a bill for $1200 stimulus checks immediately as well as a $25bln bill for airlines and $135 bln for PPP. With that, yesterday's friendly reversal reversed and bond yields moved higher throughout the night.

With that, hopes of a late August style "false start" have significantly diminished (as seen in the first chart where 0.72% continues to operate as a floor instead of a ceiling).  Granted, the bond market could be a bit more defensive than normal due to this week's Treasury auction process.  Not only do high dollar amount auctions put pressure on the "supply" side of the bond market's price/demand function, but traders also tend to push yields a bit higher (and prices a bit lower) directly ahead of auctions for a variety of reasons.  It's not the sort of thing you can set your watch to, but it happens quite often.

In addition to the auction process, there could be some additional defensiveness ahead of the Fed meeting minutes due out today at 2pm.  The Fed has been af fairly open and bond-friendly book.  The fear is that it would be hard for the additional clarity offered by the minutes to be any more bond friendly than the announcement, forecasts, and recent speeches.