Today's key development was over-the-weekend news of drone strikes on Saudi oil assets.  Iran is getting the blame, but Trump says he's not in a rush to respond and that he wouldn't like to go to war with anybody.  Oil prices logically surged while bond yields dropped.  This provided an perfect opportunity to reflect on just how incorrect it is to view oil prices and bond yields as having a reliable correlation.  Rather than re-invent the wheel in that regard, I'd just point you to THIS POST from April.

In the bigger picture, the overnight gains were insignificant.  The drop in yields did nothing to alter the trend toward higher yields (see the chart here) that began nearly 2 weeks ago.  That said, the trend may be level-off anyway, simply due to the approach of the Fed announcement this Wednesday.  This morning's post (HERE) talked about the pre-Fed outlook in much greater detail.

Long story short, we got a logical risk-off move that helped bonds and some evidence that a pre-Fed consolidation may be starting to take shape.  Tomorrow will be more informative in that regard, assuming no additional geopolitical flare-ups overnight.