Heading into the close at much stronger levels this afternoon, it would be easy to overlook the fact that bond markets were weaker overnight (following the Bank of Japan's underwhelming policy announcement) and remained in weaker territory right up to the 8:30am GDP release.  Who knows how momentum would have shaped up had GDP come in stronger than expected?  

While a weaker economy is unfortunate, its effect on interest rates is the opposite.  Bonds rallied purposefully after the +1.2 vs +2.6 percent GDP miss (not to mention the revision to the previous quarter from 1.1 to 0.8), coasting to a sideways and slightly stronger stop in the early afternoon.  Things stayed sideways until 2pm, at which point month-end bond buying momentum took over, nearly matching the strength of the post-GDP gains.

10yr yields hit 1.453 at the 3pm close and fannie 3.0s were up a quarter point to 104-03.  Next week brings a slew of economic data, including NFP on Friday.