A U.S. session without economic release and limited Fed communication (non-monetary policy; Powell – 10 ET) suggests a good chance for a test of recent reverse in domestic equities and Treasuries. Currently ESZ4 is marginally lower and TYZ4 is marginally higher. There has been fairly widespread recognition that the tremulous trade of Wednesday/Thursday was more a capitulation or cleansing than a precursor to extended real economy troubles.
Still, skittish markets are expected to persist until such time as a new consensus can be built. Part of that process may include some backing and filling of the recovered price action in the final days of last week. And while some exaggerated price swings are clearly likely, the greater likelihood is that bullish Treasury price movement and / or bearish equity price action is gradual in nature while bearish Treasury price action and bullish equity price movement can be more dramatic over the coming weeks.