Bond Selling Suggests Caution, But We're Still Data Dependent

The bond market started off the new year with the highest volume since December 15 and the highest rates in at least as long.  In fact, today's domestic session high of 3.974 was almost perfectly in line with the 3.971 back then.  This could be taken as an indication that the late December bullishness is giving way to something more defensive in January.  The other way to look at it would simply be that yields were never being true to themselves down in the 3.8% range.  That was just the product of the holiday trading environment and now we're getting back to the business of deciding whether or not we'll remain under 4%.  Call us old fashioned, but the incoming data will likely play the biggest role in that determination.