After bonds rallied hard last week, EU bonds began to rally harder.  This was most noticeable in the current week where 10yr Bund yields fell all the way back to their late June lows on the heels of favorable inflation data and conciliatory ECB speeches.  Along with the Fed next week, the ECB is seen hiking once more and then "waiting and seeing."  This represents a starker shift from the prevailing stance for the ECB than for the Fed.  As of this morning, that trading theme seems to have run its course. US bonds were already pushing back (or at least refusing to participate in as much of the rally).  Now that EU bonds are selling at their quickest pace since late June, US bonds are free to continue confirming the bottom of the range.

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