Gradual Weakness After AM Gains

Bonds began the day in weaker territory, but logged some solid gains in the first few hours. A small portion of the improvement could be arguably linked to the lowest Consumer Confidence reading since 2014 and the lowest "labor differential" of the present cycle (labor differential measures the spread between those who say there ample jobs available vs those who say jobs are hard to find). Shortly thereafter, yields began drifting higher. There was a barely noticeable bump toward weaker levels after a lackluster 5yr Treasury auction, but it could barely be distinguished from the typical random drift. 10yr yields refused to re-enter the sub-4.20% range. The Fed is on deck tomorrow, although with less than the normal amount of volatility potential (no dot plot, and near-zero odds of a rate cut or other policy shift).