What to Make of Week's Weakest Levels After Solid PCE Data

Things looked good for the bond market earlier this morning.  While yields were still quite a bit higher than those seen earlier in the week, there was an immediate, positive response to the on-target PCE data.  The gains didn't last long with sellers running the table mostly between 10am and 11am ET.  While some of the move could be due to traders moving to the sidelines ahead of near-term potential political developments, month/quarter-end positioning likely had a much bigger impact.  Bonds ended the week at their weakest levels, but this pull-back doesn't inform next week's trading in the slightest.  That honor goes to the active slate of bigger ticket economic data.

Econ Data / Events
    • Core M/M PCE
      • 0.1 vs 0.1 f'cast
      • last month revised to 0.3 from 0.2
    • Core Y/Y PCE
      • 2.6 vs 2.6 f'cast
Market Movement Recap
08:39 AM

slightly weaker overnight and slightly stronger after data.  MBS up 6 ticks (.19) and 10yr down 2bps at 4.267

11:08 AM

Tanking now.  10yr up 5.3bps at 4.34.  MBS down an eighth  on the day and a quarter point from rate sheets.

03:04 PM

Still near weakest levels.  10yr up 6bps at 4.346 and MBS down 6 ticks (.19).

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