Another Big November Rally After CPI

There's something about CPI releases in November.  Last year's example prompted one of the biggest single-day, data-driven bond market rallies on record.  This year's isn't far off--a fact made all the more stunning by the mere 0.1% beat (Core monthly CPI 0.2 vs 0.3 f'cast).  There are a few ways to try to explain the size of the reaction. On a nitty gritty note, the problematic housing component fell from 0.6 to 0.3.  On a more general note, it's possible the bond market was more interested in "no whammies" than a sweeping reversal of inflationary pressures.

Econ Data / Events
    • m/m Core CPI
      • 0.2 vs 0.3 f'cast, 0.3 prev
    • m/m Headline CPI
      • 0.0 vs 0.1 f'cast, 0.4 prev
Market Movement Recap
08:38 AM

Slightly stronger overnight and much stronger after CPI data.  10yr down 12.6bps at 4.512.  MBS up 14 ticks (.44).

10:02 AM

10s bottomed at 4.434 and are still down 18bps on the day at 4.457. MBS are up 26 ticks (.81).

12:40 PM

Off the best levels, but not by much.  MBS still up 27 ticks (.84).  10yr down 17.3bps at 4.465.

04:02 PM

Briefly in line with best levels and now slightly lower in MBS, currently up just shy of a full point.  10yr down 19bps at 4.447.

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.