If you'd told someone that core annual CPI would come in 0.4% higher than expected at a staggering 3.8%, but that Treasuries would only sell-off a few bps to trade at levels that still lower than almost all of the past 3 months, you'd probably get at least a chuckle of disbelief. If you went on to say that Treasuries would only spend about an hour at those weaker levels before rallying back to unchanged levels--well, people just might think you're crazy. While the day may be young, that crazy stuff just happened. It will be interesting to see how things shake out after the 30yr bond auction at 1pm.

Longer-term technicals suggest the risk of a resistance bounce here as the 3-week trend collides with the 1.47% pivot point.

20210610 open.png

But the reality (so far, anyway) is the aforementioned shrugging off of the inflation-driven weakness.  European bonds are certainly helping, but they alone would not be enough to justify such a reversal.  We're forced to conclude that US bond traders are absolutely onboard with the transitory inflation narrative.

20210610 open2.png

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
UMBS 2.0
101-10 : -0-02
10 YR
1.4890 : +0.0000
Pricing as of 6/10/21 10:04AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, Jun 10
8:30 Core CPI (Annual) (%)* May 3.4 3.0
8:30 Consumer Price Index (CPI) (%)* May 0.4 0.8
8:30 Continued Claims (ml) w/e 3.602 3.771
8:30 Jobless Claims (k) w/e 370 385
13:00 30-Yr Bond Auction (bl)