As we watched bond markets sell-off abruptly last week, the best case scenario would have been that the selling was overdone and that we would soon be settling-in to the wider sideways range we expected to see in early March.
Why did we expect a wider sideways range? Simply put, the consolidation range we'd been tracking was set to run out of room well before several big-ticket events could be resolved in March. As such, it would probably have taken a lot of doing to get rates to move above recent key ceilings at 2.75 and 2.82% in 10yr Treasury yields.
When 2.75% was broken on Friday, we were quickly facing the possibility that 2.82% might show up a lot soon than we'd hoped. Although 2.82% could still be in the cards, today helps that risk seem less immediate. Rates not only recovered; they also managed to bounce right at 2.75% in such a way that reinforced its technical significance. That may not offer any magical guarantee that 2.75% is an unbreakable ceiling, but it does suggest traders are receptive (i.e. interested in buying bonds) when yields approach/break ceilings that had been important in the recent past.