Bonds Tank After EU Inflation Data

For those who caught this morning's commentary on European inflation data and the subsequent bond sell-off, that ended up being the only defining feature of today's trading.  For those who didn't, European inflation data was the day's defining feature and it caused a big sell-off in the bond market!  Today's video discusses it in greater detail as well as the reason that hotter inflation data hurts even though cooler inflation data doesn't seem to help much.

Econ Data / Events
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Market Movement Recap
08:25 AM

Big surge in producer prices in Germany added to weakness overnight.  10yr up 8+ bps at 2.968.  MBS down more than half a point.

10:58 AM

Additional weakness now.  New lows for MBS, down more than 5/8ths on the day.  10yr up more than 10bps to 2.992.

02:29 PM

Modestly stronger since 11am--not a huge surprise with EU markets closed.  MBS still down half a point and 10yr still up 9bps at 2.976.

04:43 PM

Hitting the close without any new drama since 11am.  MBS down just under half a point and 10yr right in line with the last update.

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