Like a broken record, bond traders once again played off of soaring oil prices and a plunging stock market. Our benchmark 6.0% FNMA coupon bond responded by jumping 50bp higher to close at $100.91, powering its way above a pair of tough resistance levels at $100.46 and the 25-day MA ($100.73) in the process. The day's economic news was mostly bond-friendly. PCE Core Inflation in May was relatively tame with an increase of just 0.1% vs. the consensus estimate of 0.2%. Overall, the Core PCE has risen by 2.1% over the past year and is just above the Fed's target range between 1 and 2%. Personal Income jumped by 1.9% in May, the largest gain since Sept. 2005, and was largely due to the arrival of $48 billion in government tax rebate checks. Consumer Spending increased by 0.8% vs. a 0.7% expectation, the highest level since last November. The revised Reuter's/ Univ. of Michigan's Consumer Sentiment Index for June came in at 56.4 vs. expectations of 56.9. It was the lowest reading in 28 years when a 51.7 was recorded in May 1980. Meanwhile, crude oil slammed its way to a new intraday record high of $142.99 a barrel before closing at $140.21 while stocks extended their losses from yesterday's heavy sell-off. The Dow dropped close to 107 points to finish at 11,346 while the NASDAQ Composite Index fell almost 6 points to close at 2,315. The broader S&P 500 Index finished about 5 points lower to close at 1,278.