While yields still aren't back to last week's highs, they've taken a few more steps in that direction. Today's damage was mostly done after the Philly Fed data. These were my thoughts on it in this morning's 'day ahead,':
The only problem is that whole "weather" thing... It allows market participants to generally disregard weak data, but to rejoice in strong data. This will be most important today with respect to the 10am PhillyFed Survey. Reason being: Jobless Claims is a weekly report and if anything, bad weather is expected to help it improve as fewer folks make the trek to file unemployment claims. Philly Fed is the only other significant report and certainly stands a chance to be heavily affected by the weather if the weather is having half the effect that's been relayed in previous reports (and in the news). Again, this is all downside risk for bond markets
No earth-shattering conclusions there, but a good recap of markets behaving logically. If any part of the report served as damning testimony for transient weather effects, it was the 6-month outlook, which gave respondents an opportunity to comment on how they view business conditions into the summer months. Whereas most other components of the report were significantly weaker, the 6-month outlook was significantly stronger.
As stocks and bond yields digested that reality, they began moving higher together. Again, it's not much of a loss, but it's counterintuitive--a fact that magnifies unpleasantness. On a positive note, no further ground has been lost since 10:30am, so we can now watch levels during that time as supportive trip-wires for the rest of the day.
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