By the end of last week, although there was potentially a sliver of hope afforded by Friday's highs being slightly lower than Thursday's, it looked like bonds were punching out of the massive 2019 rally and embarking on the new trend toward higher rates.  But the new week of trading has increasingly called that conclusion into question.

Granted, there were a few other reasons to hold out hope over the weekend (trade deal backtracking, temporary trepidation about new bond issuance, the technical ceiling at 1.94% potentially acting as a buying cue, and the chance that the weakness was exacerbated by the "3-day weekend effect"), but no one could be blamed for not wanting to catch that falling knife.  

By moving back down to 1.82%, 10yr yields have already made it clear that a surge up and over 2.0% doesn't make sense yet, but the bigger question is whether a surge back down into the heart of the previous range makes any more sense.  I really don't think traders know the answer yet.  We're all waiting to see how the econ data continues to unfold (like tomorrow's Retail Sales) as well as several key non-data market movers (trade deals and geopolitical risks mainly).  At the very least, however, a case for a comeback is being made so far this week.  While it's no justification for complacency, it's better than the alternative.