Bond markets had an uneventful overnight session until just before the start of domestic trading hours. Most market participants were willing to chalk up some early strength to a botched suicide bombing in Times Square (the bomber was the only one seriously injured). While the bombing attempt was certainly visible in early trading, it didn't really change the trajectory for longer-term bond yields heading into the 1pm Treasury auction.
The auction itself was pretty bad (not appalling though). On today's light volume trading session, it proved to be the most profound inspiration for bonds.
If we look at a 1 or 2 day chart, the auction's impact is definitely noticeable. Look at the bigger picture, however, and it quickly gets lost in the range-bound shuffle. We continue to wait for Wednesday's inflation data and Fed forecasts for this week's biggest market movement potential.