Bonds began the day in weaker territory but quickly found their footing after softer PMI data.  In particular, ISM Services (50.3 vs 52.2) helped 10yr yields move from being a few bps higher to a few bps lower.  From here, the week shifts to placeholder mode ahead of next week's CPI and Fed announcement.  The "skip" is still the baseline for this meeting.  Instead, markets have been trading the length of time spent at the ceiling.

None of the recent data has had a huge impact on rate hike odds at the coming meeting.  But if we add Fed Funds Futures for the January 2024 contract (used to trade the December meeting), we can see a fairly quick jump from 4.0 to 5.0% over the past few weeks.  This mean the market had seen the Fed cutting rates several times by the end of the year, but now sees the ceiling remaining intact.

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