A clearly-defined break to another record high in stocks and another huge day for corporate debt issuance presented two significant headwinds for bond markets today.  Yet MBS and Treasuries both managed to hold in positive territory. 

While that may be a relatively resilient showing, we have yet to see a committed break in the other direction.  10yr yields remain blocked from entry into the 2.2's and mortgage rates similarly haven't been able to get back into the "high 3's" except among the lowest-priced fringe.  On both fronts though, we're close.  So that seems positive enough.

Now it's up to FOMC Minutes (tomorrow afternoon) and the rest of this week's economic data to see if will make enough of a difference to spark a bigger move for bonds.  It might have seemed like a good deal of movement was centered on this morning's Producer Price data, but this was merely a temporal coincidence.  The kinks are still being worked out of the newly reformatted "PPI Final Demand" data, and that was made painfully evident as this morning's headline showed higher inflation owing simply to math and having nothing to do with the reality of price movement.  After this, the report will be taken even less seriously than it already had been.