MBS Live Recap: Bonds Hold Their Ground After Weaker Data

Wednesday's CPI data was akin to some passionate political orator making a case for the country to go to war against low rates.  Yesterday's 30yr bond auction stepped in with a "not so fast" counterpoint, and now today's Retail Sales data gives us hope that cooler heads will prevail.  Bottom line, as of this morning mid-week drama looks to have given way to the same old trading range that's been intact since April 7th.

Econ Data / Events
  • Fed MBS Buying 10am, 1130am, 1pm

  • Retail Sales 0.0 vs 1.0 f'cast, 10.7 prev

  • Consumer Sentiment 82.8 vs 90.4 f'cast, 88.3 prev
    inflation expectations
    (1y)  4.6 vs 3.4 prev
    (5y)  3.1 vs 2.7 prev

Market Movement Recap
08:52 AM

Flat in Asia.  Modestly stronger in Europe, and now flat (at slightly stronger levels) after Retail Sales.  10yr yields down 2.2bps and MBS ALMOST up an eighth.  

02:02 PM

Extremely slow and mostly sideways.  Bonds are off their best levels, but still in stronger territory on the day.  10yr yields are 1.7bps lower at 1.642 and MBS are 1-2 ticks (0.03-0.06) higher.  

03:58 PM

Modest gains in the past hour or two with yields inching back toward their best levels (10's currently down 2.7bps at 1.632).  MBS aren't quite as close to their morning highs, but have also improved a bit since the last update with 2.5 coupons up an eighth on the day at 103-14 (103.54).

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