Bond Markets Unchanged Overnight, Weaker After CME Open, Data
Treasuries were almost perfectly flat overnight, moving lower in yield during Asian hours and rising slightly during European hours. MBS opened unchanged as well. Both tread water until 8:20am.
That's the time of day that CME pit trading opens, and can have a noticeable affect all on it's own. It wasn't big today, but it marked the first departure from unchanged levels.
The Import/Export price data at 8:30am is ostensibly the culprit for the next move higher, but it's important to note that this would be the first time in a long time that it's had an effect and also that the selling didn't really commence until 8:37am.
It's almost always the case that markets will move right with the release of the data when the data is in fact the motivator. This synchronicity is lacking in this morning's activity, leaving some doubt as to the causality. Nonetheless, higher-than-expected inflation is in line with the direction of the movement, so an argument can be made either way.
- Import Prices +0.1 vs -0.1 forecast
- December revised higher to +0.2 from 0.0 previously
- Export Prices +0.2 vs 0.0 forecast
- Petroleum prices -1.2
- Full Release