Powell + Data = Big Bond Rally

When traders/analysts look back to see what was on the calendar when 10yr Treasury yields broke below the 4.8% level after 2 weeks of choppy, sideways consolidation, they'll assume the Fed was the inspiration for the big rally.  That will only be partially accurate.  In fact, the Fed didn't really do or say anything that warranted a big rally.  Instead, it was this morning's slew of economic data and the Treasury refunding announcement that did most of the heavy lifting.  

Econ Data / Events
    • Employment Cost Index (ECI)
      • 1.1 vs 1.0 f'cast, 1.0 prev
    • FHA Home Prices
      • 0.6 vs 0.5 f'cast (m/m)
    • Case Shiller Home Prices
      • 2.2 vs 1.6 f'cast (y/y)
    • Chicago PMI
      • 44 vs 45 f'cast, 44.1 prev
Market Movement Recap
09:09 AM

Flat to slightly stronger overnight.  Additional moderate gains after Treasury announcement.  10yr down 5.3bps at 4.873.  MBS up 5 ticks (.16).

12:31 PM

More gains after 10am data, but leveling off now.  10yr down 11.4bps at 4.812.  MBS up half a point.

04:09 PM

Additional gains after Fed and Powell press conference.  Holding up well into the close.  10yr down 16.5bps at 4.761.  MBS up more than 3/4ths after adjusting for illiquidity. 

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