Rather than circle the wagons and consolidate the recent rally, bonds kicked the buying into higher gear on Tuesday thanks to a surprisingly weak Retail Sales report for December. This can be added to the list of recent data that has urged the bond market to get in position for a similarly weak jobs report tomorrow. Nearly 15bps of improvement in less than a week means that jobs would have to especially downbeat for this pace to continue. If the report surprises to the upside, bonds are at risk of a reasonably brisk correction, but as always, the scope of potential volatility depends on the deviation from the median forecast.
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- Employment costsQ4
- 0.7% vs 0.8% f'cast, 0.8% prev
- Import prices mm (Dec)
- 0.1% vs 0.1% f'cast, -- prev
- Retail Sales (Dec)
- 0% vs 0.4% f'cast, 0.6% prev
- Retail Sales Control Group MoM (Dec)
- -0.1% vs 0.4% f'cast, 0.4% prev
- Employment costsQ4
Gradually stronger overnight with additional gains after 8:30am data. 10yr down 5bps at 4.157 and MBS up 2 ticks (.06).
Additional gains. MBS up an eighth of a point and 10yr down 7.3bps at 4.135
off the best levels, but still stronger. MBS up 3 ticks (.09) and 10yre down 5.9bps at 4.149
Drifting sideways into the close with MBS up 2 ticks (.06) and 10yr yields down 6.1bps at 4.147
MBS Market Alerts
