Have you heard the one about the Turkish debt crisis?  Things are pretty bad for Turkey and the currency is indeed in freefall, but until the charts do something different, they're not yet making a compelling case for a "risk-off" connection to the US bond market.  Rather, today's action was centered on this morning's Producer Price Index (PPI).

PPI isn't typically a big market mover, but the stakes are a bit higher at the moment.  Reason being: tomorrow brings the more important CPI data (consumer price index).  The most widely-followed part of the CPI data--"core" year-over-year--has poked and prodded a ceiling of 2.3% during the recovery from the Great Recession, but it has yet to break through.  With last month's reading right on the 2.3% line, a downturn in tomorrow's data would serve as a fresh sign that inflation remains contained, benign, or simply less threatening than some investors may have assumed based on the increases seen so far in 2018.

In short, today's gains were most readily ascribed to PPI's suggestion about tomorrow's CPI.  Bond yields fell early and then didn't do much for the rest of the day.  10yr yields hit the 3pm close down 2.6bps  at 2.936%.  Fannie 4.0 MBS gained 3/32nds (0.09), landing on 101-24 (101.75) at the same time.