Modest Friday Bounce Does Little to Alter Bigger Picture
2 Hours, 44 Min ago
After a decent mid-day recover, bonds gave up their gains heading into the 3pm close. It’s a level of weakness that demands no explanation in the bigger picture–especially on a Friday afternoon of a week with a rally on every single previous day. Nonetheless, one could make a case for the bump by pointing to things like Senate moving closer to a spending bill vote with reports suggesting slightly more spending than before. Separate headlines involved Trump declaring an end to trade negotiations with Canada–something that might imply inflation pressure to some traders. Friday aside, the week’s theme was one of lower Fed Funds Rate expectations and that will either be amplified or called into question by the key economic reports next week (as well as CPI the following week).
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- Core PCE M/M
- Core PCE Y/Y
- 2.7 vs 2.6 f’cast, 2.6 prev
- Inflation adjusted spending
- -0.1 vs 0.1 f’cast, 0.2 prev
- Consumer 1yr inflation expectations
- Consumer 5yr inflation expectations
08:50 AM
Slightly weaker overnight and sideways to slightly stronger after data. MBS down 3 ticks (.09) and 10yr up 1.9bps at 4.254
09:43 AM
10yr yields are up 5bps at 4.286 and MBS are down 6 ticks on the day (0.19) and an eighth of a point from AM highs.
02:02 PM
Decent recovery with 10yr nearly unchanged at 3.722 and MBS down 3 ticks (.09).
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