After confirming a breakout from the "consolidation range" (the converging lines tracing the lower highs and higher lows over the past 3 months) yesterday, bonds move on to fight for the consolation prize--a consolidation consolation, if you will.

The next type of range boundary after breaking a sloped ceiling is a simple, flat ceiling marked by recent highs and/or historically significant trading levels.  In the current case, 2.52 and 2.55 have been relevant for 10yr yields.  

Unfortunately, we're starting the day OVER 2.55 already (this may lead to a discussion of the next ceiling at 2.64 by and by, but we'll cross that unhappy bridge if we're forced to).  For now, there's a fighting chance to hold one of these ceilings, despite the fairly universally negative technical momentum readings.

Just by way of checking in with the main underlying motivation for all the recent weakness, here's an updated OIS chart showing that Fed hike expectations are still on a 100% trajectory.

This morning's key event will be Draghi's ECB press conference, which begins now.  The afternoon's 30yr bond auction could serve as another focal point for volatility at 1pm.