At first glance, this morning's weakness was all about the Consumer Price Index (CPI)--the most widely-followed inflation report.  In order to make a case for CPI causing the weakness, we'd have to assert that a core year-over-year reading of 2.2% versus a forecast of 2.1% was significant, even as monthly headline inflation missed its forecast by the same amount.  Whether or not you're following me here, I'll just put it simply: it strains credulity to assign the blame for today's weakness strictly to the inflation data.  It just wasn't a big enough beat, and this hasn't been a report that's merited this sort of reaction in the past several months.

Looking for other explanations quickly reveals 2 other suspects at the scene of the crime (the 8:35-8:35am timeframe that saw bonds weaken most noticeably).  The first is straightforward.  Press Secretary Sanders commented on Trump's reception of the new bill to avoid another shut down at the end of this week.  The fact that she didn't say it wouldn't fly was taken as an early indication that the shutdown drama is over.  We've been expecting such a development to have a small but painfully obvious negative impact on the bond market and this qualifies.  

The second is less straightforward and it has to do with corporate bond issuance.  Long story short, a big corporate bond hit the market at the same time as the Sanders headlines.  It wasn't very well anticipated in terms of size or timing.  When that happens, it can add to any negative momentum already in place on any given day for the bond market.  This isn't a big market mover in and of itself, but by virtue of timing and the confusion surrounding the oddly brisk inflation reaction, it likely played a supporting role.

All of the above notwithstanding, bonds may have opted to trade exactly the same today.  Yields simply edged gently toward the upper end of the prevailing consolidation trend.  Given that they bounced off the lower end last Friday, this would be a logical move for purely technical reasons.