In the week just passed, Treasuries put in their most stable and uninspiring performance of the month (in their defense, it was a crazy month).  Every single day's highs and lows were contained inside the range set on the previous Friday.  Despite that intensely sideways performance, there were a few notable developments.  These included the  biggest bounce for MBS performance vs Treasuries since the August blowout began and the biggest inversion of the yield curve in more than a decade.

In the week ahead, bonds will have 4 days to get through the month's big opening-week slate of economic data.  As is typically the case, this includes both of the ISM reports (manufacturing and non-manufacturing), ADP Employment, and of course Friday's big jobs report.  It remains to be seen how much attention traders are willing to devote to such things given that trade war news and global market risks have been overshadowing domestic affairs.  In general, at times like this, we would just assume the beats/misses in the data would need to be much bigger than normal in order to produce a 'normal' response.

The chart above shows the sideways range that began on the Friday before last (the big green candlestick is last Monday).  We can watch 1.55 as a preliminary ceiling.  A break above would build a case for a broader correction, but we wouldn't start to worry about such things until 1.62% at the earliest.  In fact, even a move to 1.80 would not be enough to derail the prevailing lower rate narrative--assuming a strong show of support after the weakness.