Thursday brought the week's only relevant econ data with 3 occasional market movers on tap. Their results were mixed, but the important development was that the inflation components of the Philly Fed and S&P PMI data agreed that price pressures are alive and well. This made for a weaker start during the AM hours and that weakness was exacerbated by comments from Fed's Hammack (who said current data doesn't justify a September rate cut). A super strong 30yr TIPS auction at 1pm helped push back just a bit (which is quite remarkable as this essentially never has an impact). In the bigger picture, bonds could still be classified as drifting sideways to slightly weaker in a narrow range. Friday morning's speech from Fed Chair Powell isn't guaranteed to cause volatility, but it's the week's only true top-tier event in terms of volatility potential.
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- Continued Claims (Aug)/09
- 1,972K vs 1960K f'cast, 1953K prev
- Jobless Claims (Aug)/16
- 235K vs 225K f'cast, 224K prev
- Philly Fed Business Index (Aug)
- -0.3 vs 7 f'cast, 15.9 prev
- Philly Fed Prices Paid (Aug)
- 66.80 vs -- f'cast, 58.80 prev
- S&P Manufacturing PMI
- 53.3 vs 49.5 f'cast, 49.8 prev
- S&P Services PMI
- 55.4 vs 54.2 f'cast, 55.7 prev
- Continued Claims (Aug)/09
MBS are now down only 1 tick (.03) and 10yr yields are close to unchanged at 4.296 after being over 4.315 just before the data.
10yr yields are back up to 4.312 (up 1.8bps on the day) and MBS are down 3 ticks (.09) on the day.
Weakest levels after PMI data. MBS down an eighth and 10yr up 3.3bps at 4.328
MBS down 5 ticks (.16) on the day 10yr yields up 4.5bps on the day at 4.35. Fed's Hammack comments are the driver of the most recent weakness
Some resilience after strong 30yr TIPS auction (never have we ever seen a 30yr TIPS auction move the market). 10yr up 3.4bps at 4.329 and MBS down 3 ticks (.09).
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