Stronger Start, Weaker Finish

Bonds had a fine morning with overnight gains bringing yields in line with the lowest levels of the past few days within the first 2 hours of domestic trading.  From the 9:30am NYSE open on, bonds began moving in the other direction.  There were no individual, new catalysts for the weakness, and more importantly, it wasn't even a level of weakness that matters in the bigger picture.  Rather, this is the reality for the next few weeks in addition to being the occasional reality on any Friday afternoon after 3pm ET (due to the CME close).  Looking back on the week, the only move that mattered was the sell-off into Wednesday morning.  After that, the unwillingness on the part of 10yr yields to move back below 4.20 means they've been sideways ever since.  It's unpleasant in the moment, but this is nothing compared to what we could see in the coming weeks.