We've had a nice little break from the recent norm today.  Domestic economic data is actually responsible for the lion's share of bond market movement this morning.  It probably doesn't hurt that  Greece-related headlines are at least 95% lower than yesterday's (there have been only a handful today vs hundreds yesterday).  Even then Retail Sales is a respectable enough data set when it comes to market moving potential, and this morning's was unequivocally weak.

Versus a median forecast of +0.2, the headline came in at -0.3.  Excluding the automotive sector, sales were down -0.1 vs a +0.5 forecast.  The most stripped-down reading (also referred to as "the control group," which factors out autos/gas/building supplies/food services) fell -0.1 versus +0.4 forecasts and +0.7 previously.

10yr yields were roughly unchanged on the morning but fell a quick 4bps after the data.  MBS rose from 102-15 in Fannie 3.5s to 102-20, but were already up 5 ticks before the data.  Both have maintained those initial gains after some volatility surrounding the NYSE open.  A modest advance in stocks looked like it would drag bond yields higher, but the lever disengaged at 10:30am (meaning stocks kept drifting higher while bonds held their ground).