Well-Received 10yr Auction Helps Validate New Range

With the present week lacking in terms of scheduled data and events, it fell to the Treasury auction cycle to act as a litmus test for the bond market's recent rally.  Things continue to go well in that regard with a very strong 3yr auction yesterday and a "not weak" 10yr auction on Wednesday.  The absence of weakness helps to validate the 4.5%-ish 10yr yield level as part of the current range. The long end of the curve has been rallying at the expense of the short end (2yr yields rose 2.3bps while 10s fell almost 7).  Some caution is in order given the curve's recent propensity for quick corrections and the potential for curve-based resistance at -46bps (currently at -44bps after being as high as -15bps exactly one week ago).