MBS lost nearly a full point by 4pm ET and 10yr yields were up 11.4bps at 4.95%. This is the highest since October 2023 when 10s briefly hit 5.006%. At one point in the overnight session, yields were slightly LOWER on the day. Things changed in waves. First wave: oil prices surged overnight and had already broken $100 but the time PPI came out. Second wave: PPI was roughly in line with forecasts, but internal components suggested a 0.1 increase to core PCE inflation. The reaction was the sharpest of the day for bonds. Third wave: late day illiquid redistribution after 30yr bond auction (although this could also be incidental drift ahead of Friday's CPI data). If we could only focus on 2 things, it would be the acceleration in the fuel price trend and the unfriendly PCE implications in today's PPI data.
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- Core PPI m/m (Aug)
- 0.2% vs 0.3% f'cast, 0.2% prev
- Core PPI y/y (Aug)
- 4.6% vs 4.6% f'cast, 4.2% prev
- Jobless Claims (Sep)/05
- 206K vs 205K f'cast, 206K prev
- PPI m/m (Aug)
- 0.4% vs 0.4% f'cast, 0% prev
- PPI y/y (Aug)
- 5.4% vs 5.3% f'cast, 4.7% prev
- Core PPI m/m (Aug)
Much weaker on a combo of oil and PPI reaction. MBS down 5/8ths and 10yr up 8bps at 4.92
MBS down 22 ticks (.69) and 10yr up 8bps at 4.92
MBS down just over 7/8ths of a point and 10yr up 11.6bps at 4.957
MBS Market Alerts
