Supply Anxiety Ahead of CPI/Fed

The week's much anticipated headliners are clearly the CPI/Fed combo on Tuesday and Wednesday respectively.  While those events still account for a vast majority of near term volatility potential, we'll have to get through a hefty slate of Treasury issuance.  It's an uncommon auction week for two reasons: additional auctions to catch up from the debt ceiling backlog and auctions occurring earlier than normal in the week due to Fed day on Wednesday.

Bonds have been consolidating near recent high yields with the last week and a half seeing a fairly clear uptrend.

This consolidation is taking place inside a much larger, much more gradual consolidation.  Note the proximity to the upper boundary.  From a technical standpoint, the implication is that an upside breakout of the short-term pattern could prompt a break of the longer-term pattern whereas a bullish break of the short-term pattern implies more of a status quo in the bigger picture.