On probably any other day, a half point sell-off in MBS would be bad news. And on many days in the past, a half-point sell-off has been VERY bad news. Today, however, it's arguably a good thing. This paradox is only made possible by the 2+ point rally that took place after Thursday's CPI data. Today's flat trading trajectory(after overnight losses) offers some sense of confirmation for last week's rally, but the pull-back from the best levels suggests additional gains will need additional motivation.
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- monthly CORE CPI
- 0.3 vs 0.5 f'cast, 0.6 prev
- yearly CORE CPI
- 6.3 vs 6.5 f'cast 6.6 prev
- monthly HEADLINE CPI
- 0.4 vs 0.6 f'cast, 0.4 prev
- yearly HEADLINE CPI
- 7.7 vs 8.0 f'cast, 8.2 prev
- monthly CORE CPI
Only slightly weaker to start the day. No distinct trend yet. 10s up 3bps at 3.88. MBS down 3/8ths of a point.
Some weakness in the 10am hour, but holding and recovering slightly now. MBS back to 3/8ths lower on the day after being down half a point. Treasuries right in line with previous levels as well (3.88).
Very flat and boring in the bigger picture. The best and most boring half-point sell-off we can remember. 10yr still within a bp of AM levels at 3.872.
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