Bonds Almost Hold Onto Gains Ahead of Shutdown Uncertainty Bonds improved moderately overnight, adding onto what was already a fairly substantial recovery yesterday.  The morning's PCE data was slightly lower than expected, but bonds didn't seem unequivocally happy about that.  There was a modest extension of the rally and then a slow give-back into the PM hours.  Trading was very flat near unchanged levels after noon ET.  Month/Quarter-end tradeflows are assumed to be underpinning some of the volatility of the past 3 days, as is the uncertainty surrounding the government shutdown.  The most direct implication for bonds is that  they must navigate the most important data week of the month without the most important data (no jobs report or JOLTS next week due to the shutdown). Econ Data / EventsCore PCE m/m0.1 vs 0.2 f'cast, 0.2 prev Core PCE y/y3.9 vs 3.9 f'cast, 4.3 prev Market Movement Recap08:46 AM Moderately stronger overnight with some additional improvement after data.  10yr down 5+bps at 4.524.  MBS up just over a quarter point.  11:11 AM Giving up some gains.  MBS off a quarter point from highs, but still up nearly an eighth on the day.  10yr still down 4bps on the day but up 3bps from lows.  03:13 PM Weakest levels of the day for 10s, up 1bp at 4.588.  Weakest liquid levels for MBS, down an eighth of a point in 6.0 coupons.