After striking the greatest yields in more than a month yesterday, bonds have handled to get a few bps. The bulk of the healing was already in location by yesterday’s close, however yields dropped another 2bps after war-related headings just after 8am (US general said Iran’s attacks the other day were listed below the limit for war). Oil prices and bond yields continue the usual connection.
Coming up at 10am ET, we’ll get 2 financial reports that have historically been capable market movers: Job Openings and ISM Solutions. We have actually seen some evidence that the market is still going to respond to data if it’s far enough from expectations, but that risk is a bit uneven at present. Factor being: investors are awaiting financial weakness to show up due to high fuel prices. So it does not take as much of an advantage surprise in the data to trigger bond market weak point. On the other hand, if information is somewhat weaker than anticipated, that would be less of a surprise to most investors and therefore not as much of an advantage to bonds.