Today's most prominent trade was the reaction to the 9:45am Markit PMI data.  Several of the metrics were at their weakest levels since 2009.  The composite PMI was the lowest since record keeping began.  That means that the services sector is starting to sing a similar tune to the already damaged manufacturing sector--at least if we're to take Markit's word for it.  Of course, it would require additional confirmation to become intensely troubling.

It's notable then, that bonds only rallied a few bps into positive territory before turning around and heading back to slightly weaker levels on the day.  While this is consistent with the "correction" narrative that we've been discussing this week, it wouldn't have been crazy to expect a bit more strength in bonds.

The absence of strength could simply be due to the fact that deep-pocketed traders knew the positions they wanted to be in ahead of tomorrow's Jackson Hole Powell speech.  Markit made for temporary volatility but the bigger trades ultimately dictated levels.  

Several Fed speakers hit the wires today, almost eerily unified in their calls for the July rate hike to be "one and done."  They didn't say those words specifically, but pretty close!  Could this foreshadow a similar message from Powell tomorrow?  Some market participants are worried that it does.  The bright side is that those market participants are probably helping keep yields more elevated than they otherwise would be.  If Powell is bond friendly, we can recover back toward recent low yields.  Be aware though, if he confirms market fears, bonds haven't done enough to account for that yet.