Retail Sales down 1.3% and last month revised up to 0.9%? Core Producer Prices rising 0.7% in a single month (versus 0.5% forecasts). How about the eye-watering year-over-year Core PPI number at 4.8%? While there was perhaps a brief reaction to the 8:30am econ data, it was small and--well, brief. Bonds spent the entire day trading almost perfectly flat. We're left to conclude the market has taken its proverbial seat in advance of tomorrow's Fed announcement.
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Fed MBS Buying 10am, 1130am, 1pm
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Retail Sales -1.3 vs -0.8 f'cast, +0.9 prev
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Core Producer Prices y/y 4.8 vs 4.8 f'cast, 4.1 prev
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NY Fed Manufacturing 17.4 vs 23.0 f'cast, 24.3 prev
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Builder Confidence 81 vs 83 f'cast, 83 prev
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NY Fed manufacturing 17.4 vs 23.0 f'cast, 24.3 prev
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Industrial Production 0.8 vs 0.6 f'cast 0.1 prev
Mostly unchanged overnight and not much impact from the data (perhaps just a tad weaker at first). Trading levels are just a hair worse than 'unchanged.'
Drifting very gently lower in UMBS 2.0s, now down 2 ticks (0.06). 10yr yields have been flat near unchanged levels. General pre-Fed paralysis, but susceptible to afternoon illiquidity.
The day remains completely silent with little hope for anything interesting to happen in the last 80 minutes. 10s are still flat and MBS are still down 2 ticks.
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