Super High Potential Energy Surrounding Tuesday's Data

Monday proved to be the quintessential placeholder trading day that it was probably always destined to be.  Bonds lost a modest amount of ground early, regained most of it, and then lost it again by the close.  All told, it was only a few bps in terms of 10yr yields and thus not worth writing home about.  Trading levels have obviously leveled off in a sideways holding pattern ahead of Tuesday's CPI.  On that note, it would be difficult to overstate the potential energy for bonds waiting on the other side of 8:30am ET.  Granted, there's always a chance that the needle is threaded and little movement ensues, but there's also a chance that it's the most dramatic day for bonds in months, for better or worse.  

Market Movement Recap
09:28 AM

Sideways to slightly weaker in uneventful trading.  MBS down an eighth.  10yr up half a bp at 4.081

12:14 PM

Weaker into the 11am hour, but recovering now.  MBS down 6 ticks (.19) and 10yr up 2.3bps at 4.10

03:05 PM

Slightly stronger after 1pm TSY auction, but weaker into 3pm close.  10yr up 2.3bps at 4.10.  MBS down 5 ticks (.16)

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