Heading into the last hour of trading on this all-star day, bond markets have moved at a fairly average pace, albeit in rate-friendly directions.  The direction is welcome, but the magnitude of the move risks being a disappointment considering the magnitude of the miss in GDP (0.1 vs 1.2 forecast).

The caveats are well known and twfold:

1. It's NFP week so with the much bigger consideration coming up the day after tomorrow, markets hesitate to move as much as they otherwise might.

2. The perennial frustration of interpreting data that's been tainted with the stench of the "weather excuse" is that there's no great way to know how much we should discount results. 

Obviously, forecasters got it wrong today, but less obvious is how much they can actually blame the challenges of accounting for the weather.  The fact that such a thing is up for debate likely also robs GDP of some of its potential to cause a more profound rally this morning.

All that having been said, we still ended up getting the rally.  MBS improved by just over a quarter of a point in 4.0s and by 3/8ths of a point in 3.5 coupons.  10yr yields dropped 4.5bps even while stocks improved.  None of the bond market movements do anything to threaten the range, and they never stood much of a chance in that regard.  Today was a green day and we'll certainly take it, but the week continues to be all about Friday

Further to the point of Friday, NFP data is for APRIL as opposed to GDP which covers the decidedly colder months of Jan, Feb, and March.  In other words, NFP has the final vote not only because it's a more important report than GDP, but also not susceptible to the weather-related uncertainty.