If you had to guess at the bond market's response this morning based solely on the outcome of the 8:30am economic data, you'd be very well justified in assuming some selling/weakness. While that may have been the case for a few moments, it was quickly replaced by bond buying as traders parsed the Retail Sales internals, revisions, and especially the inflation-adjusted spending implications. In a nutshell, the report showed an ongoing downtrend in discretionary consumer spending and that ended up being the trade of the day--even if it wasn't a super huge trade. This was enough to keep bonds in positive territory for most of the day, despite an afternoon correction back to unchanged levels.
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- Retail Sales
- 0.6 vs 0.1 f'cast, -0.9 prev
- Core Retail Sales
- 0.5 vs 0.3 f'cast, 0.2 prev
- last month revised from 0.4
- Import prices
- 0.1 vs 0.3
- last month revised to -0.4 from 0.0
- Jobless Claims
- 221k vs 235k f'cast, 228k prev
- Continued Claims
- 1956k vs 1970k f'cast, 1954k prev
- Philly Fed
- 15.9 vs -1 f'cast, -4.0 prev
- Retail Sales
10yr yields are up 1bp at 4.468. MBS are down 2 ticks (.06)
In positive territory now with MBS up 2 ticks (.06) and 10yr down 1.9bps at 4.44
MBS back to unchanged on the day and down an eighth from highs. 10yr up half a bp at 4.463
MBS Market Alerts
