Data Driven Rally, But Next Week's Data is More Important

By the end of this holiday-shortened week, bonds didn't quite manage to completely erase the damage done during the first half, but they came close enough to help balance the near term outlook.  Credit goes to the slightly lower reading in Core PCE for the bulk of the AM rally.  But Chicago PMI didn't hurt, falling to the lowest levels in more than a decade apart from the initial covid lockdown. Bonds didn't rally for much longer after that and then spent the rest of the day in a sideways, narrow range, just above the 4.50% technical level.  As big as this week's apparent volatility may have been, next week's potential is much bigger as it brings the typical combo of events seen during the 1st week of every month (ISMs, JOLTS, ADP, NFP).