Bonds are starting the day on the back foot as Retail Sales rose 0.7% despite a median forecast of -0.8.  The Philly Fed numbers also surged past 18.8 forecasts to the tune of 30.7--decisive victories for economic data on both fronts.  Bonds are reacting logically with a move to the weakest levels of the day, but it's pretty orderly so far.  Ideally, it should be challenging for selling pressure to get too excessive as traders keep powder dry for next week's Fed.

From a technical standpoint, this weakness adds emphasis to yesterday's conclusion.  Simply put, bonds attempted to break the prevailing consolidation range with Tuesday's move lower in yields.  Wednesday then pushed back in the other direction, thus implying the breakout was not "confirmed."  Now today's early losses take yields easily back inside the consolidation range.

From here, the baseline scenario is for bonds to remain constrained by this range until next week's Fed announcement prompts a bigger move (direction TBD!).