Nearly Unchanged After As-Expected PPI

This morning's Producer Price Index (PPI) came out as expected. The components that impact core PCE were also uneventful. Stocks and bonds initially rallied but the gains were erased in less than 20 minutes. Higher oil prices coincided with the bounce toward higher yields, but the longer-term correlation remains weak enough that we wouldn't read too much into that. After 9:30am, stocks are selling off enough to bring bond yields just a hair lower from intraday highs. All-in-all, we suspect the modest weakness in 10yr Treasuries is best viewed through the lens of traders squaring yesterday's curve trading positions amid lighter mid-November liquidity.  5yr yields just hit 'unchanged' levels and MBS are close to doing the same.