The Day Ahead: Bonds Making Big Decisions or Merely Acquiescing?

In July 2012 and July 2016, 10yr yields visit to all time lows was cordoned-off fairly neatly by yields in the 1.50-1.52 neighborhood.  We've been talking more about 1.52 this time around, but in the biggest of pictures, it doesn't really matter.  In both cases, yields broke below 1.5-ish, and then treated it as a ceiling for a while before ultimately moving higher.

In both cases, a battle was being fought in early August--a battle for reentry to the all-time low range.  Looked at another way, the battle could also simply be to avoid breaking above the slightly higher pivot points around 1.60.  In the current case, we just defended the ceiling at 1.60-ish and are now doing something we never attempted in 2012: trying to move back below not only the lower pivot point, but also the implied trendline of "higher lows" leading upward from early July's all-time lows.

For the sake of reference, here is the similar time frame from 2012.  Notice the lack of effort to break back below the diagonal line and 1.52 simultaneously:

If we only keep these Treasury charts in mind, it's tempting to conclude that "big decisions" are being made or that "big things" are happening.  While that's true in a sense, we must also ask ourselves if this is really that big of a deal, or really that unexpected in the context of 10yr yields around the rest of the world.  Here's a chart of US 10s with the 3 other top dogs:

In the context of this chart, it's almost as if US 10s are merely delaying the inevitable, no?  Granted, low yields overseas do not guarantee that US yields follow suit, but they do speak to the notion that another push to all-time lows would be far from unprecedented.  

They speak to other things too--chiefly that the global growth environment is unable to justify higher rates.  You can look at that either through the classical lens of "growth + inflation = rates," but I would recommend the lens that the smartest folks in the room have been using for a while now: "growth + inflation = something that's not enough to preclude increasingly accommodative monetary policy among the world's largest central banks." 

Bottom line: if today isn't the day, and if this week isn't the week where US yields experience great success is breaking certain technical floors, we'll probably get another chance.