While last week saw a generally narrow range, bonds managed to reverse two weeks of losses with 10yr yields moving down from 4.05 to 3.95.  The gains certainly wouldn't have been as big without Friday's PPI data.  As the new week begins (or rather, as it began), bonds are rethinking last week's level of aggression.  At first glance, it may seem like a big mysterious jump in yields--one that takes the 10yr back into the previous consolidation range.

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But we need to keep in mind that the rest of the financial world was open for business on Monday. Treasury futures show that the weakness has been gradual and linear.

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The takeaway may not be too different.  In both cases we could say that there was a bit of a short squeeze or a bit too much short covering heading into the weekend and that trading levels are getting back to a more neutral stance from which to digest Fed's Waller (today) and Retail Sales (tomorrow).