July 8, 2011. That's how far you'd have to go back to see higher 10yr yields than we saw today. At their worst, they were at 3.0945%. At the close, it doesn't look like they'll be much better (currently trading in the 3.07+ range). Up until today, the high had been 3.04%, both 3 weeks ago and on Jan 2, 2014.
When rates spike to the same high level that many years apart, it only reinforces the technical significance of that level. Thus, any break above 3.04% was likely to result in a significant amount of follow-through, and that's really what today was all about. It only took moderate weakness overnight to get bonds within striking distance. From there, an as-expected Retail Sales report did the rest of the trick.
But why did we get hurt so bad if Retail Sales was merely "as-expected?"
Again, it's not about Retail Sales. It's about momentum. Retail Sales merely served as one potential point of salvation for rates. If it had come in much weaker than expected, today's breakout may have been delayed for a few days, but that breakout would likely have happened nonetheless.
Quite a few lenders managed to let the selling run its course before putting out rate sheets. That made for some ugly rates this morning, but with fewer negative reprices than we typically see on days this big. The downside is that there's a bit of weakness left to price in to those rate sheets if bonds happen to hold steady overnight.