Bonds sold off on Friday, with the easiest scapegoat being the extra strong Consumer Sentiment number (72.6 vs 65.5 f'cast). 10yr yields remained below yesterday's highs, and although MBS prices were lower than yesterday's, they'd outperformed Treasuries earlier in the week. In short, most of the week's gains remain intact. In fact, considering it was a summertime Friday with super strong data after 4 straight days of gains that took bonds into overbought territory in the short term, one might consider a 6bp bump to 10yr yields and a 3/8ths of a point loss in MBS to be a victory, of sorts.
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- Consumer Sentiment
- 72.6 vs65.5 f'cast, 64.4 prev
- Sentiment, Current Situation
- 77.5 vs 70.4 f'cast, 69.0 prev
- Inflation expectations
- 1yr - 3.4 vs 3.3 f'cast
- 5yr - 3.1 vs 3.1 f'cast
- Consumer Sentiment
Modestly weaker all morning with sharper selling after sentiment data. MBS down 3/8ths and 10yr up roughly 4bps.
Additional weakness into the PM hours, but stabilizing now and recovering. 10yr at 3.81. MBS down only a quarter.
Weakest levels of the day in 10s (up 6 bps at 3.827) and down 3/8ths in MBS (not quite weakest levels of the day).
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