The sun also rises and inflation also misses its forecast! After several months of reasonably big upside surprises, core PCE inflation finally undershot the median forecast, even if not by much (3.5 vs 3.7). Based on recent reactions to inflation data, this isn't huge news because markets are more interested in the longer-term inflation landscape. 

For now, traders have been willing to look past inflation swings that have been driven in large part by covid-related supply chain disruptions.  Big upside surprises in recent months didn't do meaningful damage to bonds, so turnabout is fair play with Friday's downside surprise.  Month-end, corporate issuance, earnings, and technicals will set the tone for small scale volatility.

In the slightly bigger picture, both stocks and bonds continue to fly holding patterns as they wait to see if the US curve ends up looking like the UK curve

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MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
UMBS 2.0
101-31 : +0-04
Treasuries
10 YR
1.2270 : -0.0420
Pricing as of 7/30/21 11:00AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Friday, Jul 30
8:30 Core PCE Inflation (y/y) (%)* Jun 3.7 3.4
9:45 Chicago PMI * Jul 64.6 66.1
10:00 Consumer Sentiment (ip) Jul 80.8 80.8
10:00 Sentiment: 1y Inflation (%) Jul 4.8
10:00 Sentiment: 5y Inflation (%) Jul 2.9