Stop me if you've heard this one before: bonds have been trading in a mostly sideways, consolidative range ahead of what should prove to be key events that motivate a break outside of said range.  

Sure, it may be a common stance for the bond market, but that doesn't make it any less relevant.  In fact, it may have been even more relevant than trade war headlines today.  If you ask the stock market, trade war headlines were the key market movers and  the reason equities were able to finish moderate stronger on the day.  By that same rationale, bonds should have finished weaker (positive trade war updates = good for stocks and bad for bonds).

While bonds did indeed respond to the headlines, they also spent a lot of time shrugging them off and doing their own thing.  What thing is that?  Simply put, yields trudged back toward the lower end of the prevailing consolidation range in a calm, linear fashion.  The motivation for such a thing?  Easy one!  They'd just hit the upper boundary of that range early in the overnight session, so why not head back to the lower boundary after that?

It continues to the case that next week's economic data is the best bet for a sustained breakout from this consolidation range, but we can't rule out a more impassioned reaction to trade-related headlines if the right news comes out of the G20 summit tomorrow.