Calmer Day so Far, But No Relief From Recent Rout

With mortgage rates right where they were 2 weeks ago, things could be worse. But after rising 20bps from last week's lows, things could also certainly be better.  A vast majority of recent volatility was seen at the start of the holiday-shortened week yesterday with a move that left no doubt as to the range breakout in 10yr yields. Geopolitical issues were the key driver and Japanese debt drama played a small supporting role. Now today, with Japanese bonds recovering a bit and no new geopolitical escalation in Davos speeches, bond bearishness has cooled off and given way to more sideways vibes. At many times over the past few years, we've been much more interested in economic data than geopolitics, but that balance is shifting. Econ data will certainly still matter, but geopolitics and domestic fiscal developments will be worthy additional considerations.