CPI, CPI, CPI...

The "Consumer Price Index" is the one thing on this week's economic calendar that stood out as a top tier potential market mover.  After a few revisions, the lowest-in-years reading of 1.6% for "Core CPI" became 1.7% in June and has held at 1.7% in the 3 subsequent reports.  If we see that number finally rise tomorrow, it will be an ominous sign for bond bulls--one that that suggests there may be something to the Fed's assessment of super low inflation being temporary.

The only problem with CPI being a big market mover--at least as far as TODAY'S trading session is concerned--is that it doesn't come out until tomorrow!

As the week has progressed, we've seen a series of swings and misses by all manner of market data, events, and headlines.  This morning has been no different so far, with the less-widely-followed Producer Price Index coming in stronger than expected.

Of course now that I've built up the importance of CPI, there's a risk that I've jinxed its market movement potential for tomorrow, but it's still the best shot we have to see some movement.  Between now and then (and even after the data), we need to keep an eye on the technicals we've been watching for 2 weeks now.  These are discussed more in the chart below and then again in great detail in the daily lock/float commentary and market briefing on MBS Live (the Huddle).

2017-10-12 open


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.5
102-29 : +0-02
Treasuries
10 YR
2.3410 : -0.0040
Pricing as of 10/12/17 9:02AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, Oct 12
8:30 Producer Prices (%) Sep 0.4 0.2
8:30 Core Producer Prices YY (%)* Sep 2.0 2
8:30 Core Producer Prices MM (%)* Sep 0.2 0.1
8:30 Jobless Claims (k) w/e 251 260
13:00 30-Yr Bond Auction (bl)*