Today brought two events that should theoretically have helped bonds: a much weaker producer level inflation reading (2.4 vs 2.7 forecast for core PPI) this morning, and a fairly strong 10yr Treasury auction in the afternoon.  But neither had much of an impact by the end of the day.  To be fair, bonds did manage to gain a small amount of ground, but those gains were intact before the friendly events crossed the wires.

This isn't an out-and-out mystery, however.  The PPI data is rarely a huge market mover in the first place.  With the more important CPI coming up tomorrow (among other things), it's no surprise to see today's PPI offering little inspiration for would-be bond buyers.  

The 10yr auction suffers from a mostly similar fate.  It is a positive anecdote for bonds, to be sure, but traders still have to wait to see how the rest of the week's key events unfold.  

With all of the above in mind, bonds simply drifted sideways at the morning's slightly stronger levels today--effectively "consolidating" a week and a half of selling pressure, but NOT "correcting" back toward stronger levels.