Media Talking 10 Year Yield

Usually the financial media doesn't care about bonds, except when you get a big selloff.  The selloff is now starting to get the media's attention, as all eyes are on the bond market to see if 3.00% 10 year yields will be broken.  I am sure there are some stops above 3.00% 10 year yields which could be triggered if the 10 year goes above 3%, but that would be a one time liquidation, akin to a stop hunt by market makers to take out stop orders and then quickly reverse. 

A lot of this bond weakness is due to higher oil prices, and some of it is due to the pure price action and reflexivity.  As prices go lower, more bond holders get nervous and hedge their long exposure by selling futures, and the trend followers pile on to the trade and sell more.  It becomes a non fundamental move, as panic sets in.  The bond market is starting to look a bit panicky as a relatively weak stock market doesn't help at all in keeping a bond bid. 

I am a longer term bond bull but in the short term, this bond market is in liquidation mode, so it can get a little worse before the bonds find a bottom.  I don't think bonds can selloff too much, just because the global economy is actually slowing down and higher LIBOR rates are having an effect on short term corporate funding costs.  If the Fed actually tried to follow their dot plots and take the Fed funds rate to 3.00%, the economy would crater and the yield would have already been inverted well before that happens.  Anything above 2% Fed funds is tight for this overleveraged economy, and trying to force feed interest rate increases on this vulnerable stock market would be a disaster.  I doubt Powell wants to be the one who pulls the trigger and blows the brains out of this debt laden global economy. 

Friday's selloff was exacerbated by continued bond weakness, and we have the relief rally gap up in progress.  I except choppy trade today, with a test of the overnight lows today, and then a rally later this week.