Bonds have had a good run recently--perhaps their best when it comes to arguing for a ceiling to cap the brutal rate spike of 2022. The week began with enough strength to keep hope alive that the friendly correction could continue, but not quite enough strength to avoid worrying that we were simply seeing a set-up for a broader sideways range. The latter would make good logical sense considering inflation would need to drop significantly before bonds rallied in a sustainable way and that inflation data can only come in so fast.
Now today, a recovery in overseas equities markets and a strong Retail Sales report are making it easy for bond traders to reinforce the floor of the broader range. In fact, the floor is currently looking more like a trend of higher lows for bond yields.