Bonds Can't Catch a Break This week was supposed to be all about CPI confirming or rejecting the notion that core inflation was finally falling into line.  A reading at or below the forecast would ostensibly have done that, but bonds managed to sell off abruptly that same afternoon.  Now today, a modest 0.1% beat in Producer Prices (a far less relevant report) resulted in additional selling.  One might be forced to conclude that the selling is happening for reasons that transcend the data despite the persistent cries of "data dependent" from the Fed and those who hang on their every word.  Econ Data / EventsCore Producer Prices month-over-month0.3 vs 0.2 f'cast, 0.1 prev Core PPI y/y2.4 vs 2.3 f'cast, 2.4 prev Market Movement Recap09:35 AM Flat overnight and weaker after data.  MBS down 3/8ths and 10yr yields up 4.5bps at 4.152% 01:06 PM treading water at weakest levels.  MBS still down 3/8ths.  10yr up 5.5bps at 4.162. 03:15 PM Weakest levels for Treasuries, up 6.3bps at 4.17.  MBS down 10 ticks (.31), outperforming.