One Down...

I called for the 10-year to hit 5.20% some time this week on the theory that sentiment was overly sanguine. Reinforcing my point, we get a in-line PPI report this morning, and it causes a 1/4 point sell-off. I think if it becomes clear that the Fed is going to 5.5%, the 10-year can't hang around 5.0%. At least not until a cut is in the offing.

Foreign security purchases came in strong. Treasury market doesn't care. The Asian bid for high-grade corporates and MBS have been a support for spreads, so that may help those markets.

MBS market is outperforming the 10-year by 3-4 ticks. Corporates are firm, media in 1bp or so. 10-year TIPS outperforming by 1 tick.