Early Strength Gives Way to Steady Selling

Bonds started the day in fairly good shape with a rally at the open and a certain measure of defiance of another jump in fuel prices. The defiance quickly gave way to underperformance--a fact that suggests short-term tradeflow considerations for the bond market or perhaps that we're simply putting the trading day under too much of a microscope. Either way, both yields and oil prices were higher by the end of the day although the 10yr avoided breaking above last week's highs.