In the Day Ahead, we discussed bond traders' probable goals regarding keeping things as calm as possible.  This depended on unexpected headlines and movements in external markets.  Either of those were capable of throwing curveballs, and both threw a few today!

Out of the gate, bonds were flat, but once equities trading picked up, Treasuries improved in line with a morning stock sell-off.  At the time, it looked like stocks were set for a death-spiral well-into the lowest levels in more than a month.  While most averages were indeed lower on the day, the losses were moderate.  In fact, stocks were briefly positive due to mid-day Trump-related drama.

This installment featured Bannon's departure from the White House team.  I don't have any political views on this development, but markets liked it.  Well, stocks liked it, and bond yields were fairly well tied to stocks today.  As such, the news of Bannon's ouster pushed yields into negative territory heading into the afternoon, but both stocks and bonds ultimately moderated with the latter drifting sideways near unchanged levels to end the day.