Europe.

Above all else, the evolution of the European recovery--especially as it relates to the various fiscal and monetary policy responses in the EU and UK--has been and will be responsible for near-term bond market momentum.  In this context, 'near-term' refers to the next few months to a year.

It's not that other things don't matter.  Indeed, the election has been causing noticeable gyrations, and of course domestic bond markets are always responsive to changes in the Fed rate hike outlook.  But whereas these things account for day to day volatility and a modicum of longer-term momentum, the European situation is the overriding source of momentum.  For instance, consider the highlighted spikes in the following chart (one from a Fed announcement and another from election headlines) both neatly contained by the broader European trend.

If we're going to look at a chart of US Treasuries and label the dominant trend with words like "European Influence," it probably makes a lot of sense to back that up with a chart that actually contains some European financial instruments.  German Bunds are the benchmark for European bond markets.  So let's use them.  And let's also throw in UK 10yr yields (aka Gilts) due to 2016's focus on Brexit-related trading. 

Not only can we see European bond markets trumping things like this morning's NFP, but unequivocally, they've provided a nice drag on Treasury yields ever since the 2013 taper tantrum.  

When I look at this chart, I think "the early 2015 bounce was scary, but it would make sense to see a decent-sized correction following the massive rally in 2014."  Now that we've had a far more moderate rally from the middle of 2015 to the middle of 2016, and a far more gradual bounce this Fall, there is serious cause for concern.  Bottom line, the next move higher (if there is one), could have more staying power than the brief resetting of the pins seen in early 2015.  Everyone's holding their breath to see if we'll get clues about such a move in the early December ECB announcement and press conference.