10-Year Note Futures regained about half of yesterday’s drop (and the Euro recovered some of Thursday’s losses in lockstep).


The bond market flipped yesterday after the release of the Markit Services PMI, the first important number to come in above expectations in almost a month. With so many gains locked up in so much duration, the players in the bond market musical chairs game are poised to bolt at the first sign of an excuse for the Fed to raise rates.

They may not get it. The Atlanta Fed’s GDPNow forecasting model, which continuously adjusts its forecast by weighting the importance of each new data release, puts annualized GDP growth in Q1 at must 0.2%, far below the lowest forecast in the Blue Chip consensus.


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