GOOD MORNING! Treasury yields moved higher to begin last week but the front end of the curve led them lower the rest of the week amid declining oil prices and a tech sector led sell-off in equities that had traders scaling back on some of the rate hike bets. The week ended with some caution on developments in the Middle East. President Trump said Iran violated the ceasefire agreement with its drone attack on a cargo ship and as Oman told European officials that ships going through the Strait of Hormuz may have to pay. On the economic data front last week, May’s personal income and spending after soft readings in April and the headline PCE Deflator, like CPI and PPI, rose to its highest level in 3 years.

     It appears that the Middle East conflict is reaching the fatigue stage for the markets. Despite tit-tor-tat strikes between the US and Iran following Iranian strikes on ships and neighboring countries, officials are trying to put lipstick on the supposed truce and ceasefire where there is more fire than cease on the mis-understanding of the Memorandum of Understanding (MOU). Treasuries are narrowly mixed in early trading while stock index futures are up moderately following Comcast’s news of splitting up into public companies. The short week ahead will be busy with quarter-end and a slew of economic data that is mostly biased toward the labor market. The will Tuesday’s JOLTS, Wednesday’s ADP Private Employment Change report, and Thursday’s jobless claims and June employment report. There will also be manufacturing PMIs from the S&P Global Group and the Institute for Supply Management (ISM).