Bonds Get The Rally They Deserved in Exchange for Cooler PCE Data
This week's data focus was all about today's PCE inflation report. As it happened, data from earlier in the week began to make a case for a bit of a "lead-off" ahead of the report itself. Thankfully, the numbers condoned the rally, but because so much of it had happened in the form of a lead-off, today's follow-through was limited. Case in point, closing levels aren't too far from opening levels, but opening levels were almost a quarter point better day-over-day. Combine that with conservative pricing strategies yesterday and rate sheets made some impressive shifts in many cases.
Jobless Claims..... 231k vs 228k f'cast, 233k prev
Core y.y PCE....... 4.7 vs 4.8 f'cast, 4.9 prev
Core PCE m.m..... 0.3 vs 0.4 f'cast, 0.3 prev
Steady gains overnight, starting in the EU session. Modest additional gains at the open following as-expected inflation data. 10yr down 7bps at 3.017 and 4.5 UMBS up 9 ticks (.28).
AM gains remain firmly intact. In fact, there's a bit more strength now in Treasuries with the 10yr down 9bps at 2.996. MBS remain roughly a quarter point higher on the day.
Treasuries continue trickling to lower yields, now down 11bps at 2.978. MBS up almost 3/8ths. Calm and collected all day.
Losses at the 4pm NYSE close, but still well into positive territory on the day. MBS up 7 ticks (.23) but down 6 ticks (.19) from the highs. 10yr still down about 7 bps, but 4bps up from the lows of the day.