Oil surges ... bonds fall

Some breaking news: Energy Secretary Samuel Bodman is out on the tape, saying the U.S. will double the side of the country's Strategic Petroleum Reserve. Granted, this will occur over the next two decades, not the next two months or two years. But government buying is still expected to reduce supply by about 100,000 barrels per day, starting this spring. Crude oil has shot up more than $2 on the news.

Meanwhile, bonds are trading near the lows of the day. Whether or not it's related to the oil news (because higher oil prices could translate into renewed inflation pressure), you can never know for sure. But given the significance of the 4.80%-4.85% yield area in the 10s, I'm keeping a close eye on the market action. If we take that out, it wouldn't take much to get us to 5%.