Stronger Start, But Still Mostly a Placeholder of a Day

The overnight session was generally a mirror image of yesterday's with 10yr yields moving several bps lower in a linear, steady trend.  Unlike yesterday, 8am didn't bring an obvious reversal.  

While this stronger start is "nice," it's meaningless in the bigger picture.  Apart from a truly astonishing surprise, nothing about today can change the fact that bonds are roughly in line with their weakest levels in months ahead of a CPI report that will either result in more weakness or a decent bounce. And EVEN THEN, it may not be enough to coax yields outside the boundary of 2024's linear uptrend.  The outer lines in the chart below (2 standard deviations away from a linear regression) are at roughly 4.53 and 4.18.  It would take a big reaction to CPI to get to either boundary.

Today's 3yr Treasury auction is the only calendar item of note (pun intended).  It's capable of introducing some noise in the afternoon, but not much.