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Uneventful Friday. Thoughts Turning to CPI

Apart from the fact that 10yr Treasury yields are about 25bps higher than they were before last Friday’s jobs report, it was an uneventful week for the bond market with only one or two exceptions.  The first exception was the exceptionally large amount of corporate bonds that hit the market in the first half of the week.  The result was fairly constant upward pressure in rates for no other apparent reason.  The 2nd was Wednesday’s ISM Services data which added to the upward pressure.  Thursday marked a technical correction/recovery and Friday ended up being entirely superfluous.  Thoughts are already turning to next week’s CPI which occurs one week before a fairly important Fed meeting.  Volatility potential would be high anyway, but doubly so in this case as the Fed is in the blackout period ahead of its meeting, thus allowing the market’s imagination to run wilder than normal.