The 10-Year Yield Index broke out rather decidedly in the last days. The Triple Top break out has pushed yields up to 4.05%
Could it be that bond market players are predicting more hawkish tones from the Fed? This break out at 39 would indicate that.
However, I have felt the bond market is just as prone to sharp movements as the stock market, and it's possible this upside breakout may soon reverse.
A few prominent strategists are looking for PPI figures to be released on Thursday coming in lower than expected. Thomas Lee, of Fundstrat, recently went out on a limb and predicted a print of "2.5 - 3.0" (annualized) by virtue of softening prices in Used Cars and Rents. Edward Yardeni, takes a similar view and correlates the PPI to figures released in China suggests deflation is a possibility.
Will this change the tone of the Fed hawks? Head fake or not, we'll know more on Thursday.