The Treasury market was sounding alarm bells from the very start of the day. The longer-end of the market led and the curve continued in flattening mode. The yield on the 10-year note fell to 1.718% in overseas trade and retouched that level again in New York hours. The note had settled at 1.779% on Monday and, if you recall, it was yielding as much as 1.85% last week and as much as 1.90% the previous week.

Here are the latest items on the markets Wall of Worry screen, listed in no particular order:

1) Fed Chair Janet Yellen told the markets in no uncertain terms that the global situation was high on its list and it was necessary to move with caution. The markets also believe the Fed is willing to risk a higher degree of inflation in order to make sure inflation, and not deflation, gets embedded back into prices;

2) Tuesday it was Japan’s turn to worry about a stronger currency and its stock market dropped about 2.5% as the yen rose to 17 month highs;

3) The weekend leaks about tax fraud and abuse in some of the highest places of power around the world has already stirred the hornet’s nest and there have been some resignations;

4) It is hard to believe, but Greece looks like it might be back with another tragic sequel. There might be another snap election in Greece as well;

5) This is occurring just as the Commonwealth of Puerto Rico is praying for help from the U.S. Congress. The Government Bank of Puerto Rico was slapped with a lawsuit from a group of hedge funds on Monday. It is a well known fact that the total debt of the country is around $70 billion but now there is talk of a moratorium on debt payments until things can be figured out;

6) In the meantime, there are some that worry that if Puerto Rico wins Chapter 9 bankruptcy protection, some US states might try to follow suit. This comes at a time when some billionaire investors are taking their residency to more friendly tax states like Florida. So now the muni market becomes another source of stress for the markets and the economy;

7) The fight over curbing oil production among OPEC nations has not been resolved. That meeting does not take place until April 17. This and other concerns has oil hovering around $35/bbl now from a high of $40/bbl a week or so ago;

8) China’s issues on a wide variety of fronts still dominate market discussion;

9) The topic of corporate inversion is high on the list of market concerns especially in light of the Pfizer/Allergan takeover. A whole host of stocks came under pressure Tuesday as Treasury proposed new rules on inversions and penalties;

10) It is not surprising that all the US presidential candidates are barking loudly about inversions now. The spectacle of this particular election season has many foreigners nervous as hell to begin with;

11) Lack of corporate profits around the world is another stress inducer;

12) IMF Head Christine Lagarde said the risks of a "new mediocre" trap have increased and she urged politicians to go further to spur growth. While she said the world is not in crisis, growth is too low to be felt by many;

13) The world is already concerned about the lack of ammo available for the central banks to use. Truth be told, people have no choice but to say negative interest rates are useful;

14) People are already chattering about the May 20-21 G-7 meeting between the finance ministers and central bank governors and the G-7 meeting May 26-27;

15) Some took note of Minneapolis Fed President Neel Kashkari comments on Monday night. "I certainly didn’t see oil going from $150 to $30" a barrel, he said. "That’s a very recent major economic shock … that none of the financial prognosticators predicted. That shows how hard this is;"

16) The Reserve Bank of Australia left rates unchanged Tuesday but MNI reporter Sophia Rodriquez if conditions stay about the same or worsen, it is likely to lower the cash rate at the next meeting in May as fresh forecasts are likely to provide a confirmation of the dampening impact on the economy from the higher exchange rate.

On the topic of inversions, analysts at Goldman said Treasury regulations "might increase the effective tax rate of foreign companies operating in the US and would put further restrictions on some pending and future corporate inversion transactions."

"A shift in the outlook for the Republican nomination would also mean a shift in the policy debate. Mr. Trump has been a more vocal critic of trade liberalization and pharmaceutical pricing practices than the other Republican candidates," Goldman added.

Back in the U.S., the data is much less alarming but no one is paying much attention as fear prevails everywhere else.

The February trade balance widened to -$47.1 billion, slightly worse than expected, versus the gap of -$45.9 billion in January.

The Atlanta Fed’s GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2016 is 0.4 percent on April 5, down from 0.7 percent on April 1.

After yesterday morning’s light vehicle sales release from the U.S. Bureau of Economic Analysis and the manufacturing report from the U.S. Bureau of the Census, the forecast for real GDP growth declined from 0.7 percent to 0.4 percent due to declines in the forecasts for real consumer spending growth and real equipment investment growth. The forecast for real GDP growth remained at 0.4 percent after this morning’s international trade report.

The March nonmanufacturing ISM Composite Index for March rose to 54.5 from 53.4 in February. The Business Index rose to 59.8 from 57.8 Employment rose to 50.3 from 49.7 and New Orders rose to 56.7 from 55.5 in February.

The March Markit services PMI was finalized at 51.3 from the flash of 51.1.

–Talk From the Trenches is a daily compendium of chatter from Treasury trading rooms, as well as some sister market trading rooms, and is offered as a gauge of the mood in the financial markets. It is not necessarily hard, verified news.

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