Does Today's Data Change The Outlook?

There were a few rate friendly tidbits buried in the CPI data, but for the most part, it was right on the screws versus expectations.  For those wondering about the tidbits, the core services prices excluding housing/rent declined noticeably.  The market reaction tells us the report was clearly "good" for rates, but was it enough to change anything in the bigger picture?  The unwillingness to rally past any range boundaries tells the story there.  Hurry up and wait for a collection of multiple additional economic reports spaced over a few months that cohesively suggest a shift.  Wish we could tell you how long you'll be waiting... 

Econ Data / Events
    • Core M/M CPI
      • 0.4 vs 0.4 f'cast, 0.4 prev
    • Core Y/Y CPI
      • 5.5 vs 5.5 f'cast, 5.6 prev +
Market Movement Recap
09:15 AM

Moderately stronger after as-expected CPI.  MBS up just under a quarter point.  10yr down just over 5bps at 3.47

12:26 PM

Sideways to slightly stronger since the data.  An odd set-up for a 10yr auction.  10s currently down 7.5bps at 3.449.  MBS up 10 ticks (.31).

01:06 PM

Not much of a reaction to 10yr auction.  10s down 7bps at 3.453 and MBS up 10 ticks (.31).

02:51 PM

Sideways to very slightly stronger.  10yr down 8.5bps at 3.439 and MBS up 3/8ths.

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