More Gains. Are Bonds Overbought?

The combination of friendly economic data, dovish comments from the Bank of Canada, and lower oil prices helped yields drift down to new 3-month lows this morning.  In less than a month and a half, that brings the size of the 10yr yield rally to nearly 90bps.  Is that too much, too soon?  The answer could depend on perspective.  It's a big move in and of itself, but one could argue that bonds were brutally oversold heading into mid October.  One reassuring piece of evidence is the extent to which yields have remained calm and sideways on each of the past two afternoons after rallying to new multi month lows. Either way, there's no debate about the data dependent nature of the movement.  With that in mind, Friday's jobs report remains critically important.