Bonds Continue Taking Their Seats Ahead of The Big Show

Bonds Continue Taking Their Seats Ahead of The Big Show

Although bonds continued to improve yesterday, the pace of gains has progressively slowed throughout the week.  Our base case was for that momentum to shift sideways or pull back a bit today and that's exactly what we've seen.  It was the base case because it would be a logical move for a market that is leaning in a bullish direction as it waits for the data with the power to endorse or reject the bullish lead-off.  5 straight days of gains (plus a counterintuitive rally following ISM Services) was plenty.  Today's relatively flat performance is actually just another indication of latent optimism for friendlier data in the future.  As for the "big show," it remains to be seen how much of the spotlight goes to Friday's jobs report with next week's CPI continuing to be at the top of the marquee.