Early Volatility And a Decent Recovery

Bonds lost ground in the overnight session after Chinese regulators cautioned banks against holding US Treasuries. That move was short-lived and more than fully erased before 9am ET. Part of the bounce back can be attributed to a newswire quoting Hassett saying we should expect slightly lower jobs numbers. Some may view this as telegraphing advanced knowledge of Wednesday's numbers, but that would be highly unlikely based on the typical protocol (Council of Economic Advisors Chair typically gets advance notice the afternoon before a key economic report).  It was also arguably taken out of context. The rest of the day was uneventful, sideways, and slightly stronger, with bonds ultimately ending at modestly lower yields. MBS were flat.