A slew of Purchasing Manager Indices (PMI) reports, which are essentially more granular, timely and marginally more targeted versions of GDP, sparked a massive rally in European bonds overnight. This trickled down to US bonds, but to no extreme effect. Things improved after domestic PMI data made similar suggestions (slower growth and less inflation), with bonds at their best levels since before the last fateful CPI report (the one that triggered the drama of last week).
Barring another CPI-type surprise, recent data and market movements confirm that we have seen a rate ceiling (i.e. when 10-year yields peaked at 3.50% last Since then, they have broken the June uptrend and removed key technical levels at 3.31, 3.19, 3.13, and now this morning, 3.07.