The Treasury market is caught between two strong currents. On the down side is the large amount of issuance the US government will have to make over the next few years. Excess supply means decreasing prices and increasing rates. At the same time, the Treasury market is still the traders safe haven when the market drops.
The safe haven bid was in full display yesterday as the market dropped hard. In addition, the Treasury had some very successful auctions last week which allayed fear that there would be decreasing demand for US Treasuries. As a result the market caught a strong bid which has driven prices through resistance levels.
Notice that prices have run into upside resistance at the lower 90s level two times over the last few months. that means we're in an important area. A move through this level would probably signal further upside moves.
