The AM So Far

  • Jobless Claims Better Than Expected
    • fell to 514,000 oct 10 wk (cons. 525,000) from 524,000 prior wk (prev 521,000)
    •  jobless claims 4-wk avg fell to 531,500 oct 10 wk from 540,500 prior (prev. 539,750)
    • continued claims fell to 5.992 mln oct 3 wk (cons. 6.01) vs 6.067 mln prior (prev 6.040)
    • insured unemployment rate fell to 4.5 pct oct 3 week from 4.6 pct prior wk (prev 4.5)
    •  new jobless claims lowest since jan 3, 2009 week; continued claims lowest since march 28 week
  • CPI
    • +0.2 pct (+0.1685; consensus +0.2), exfood/energy +0.2 pct (+0.1643; cons +0.1 pct)
    • year-over-year -1.3 pct (cons -1.4 pct), exfood/energy +1.5 pct (cons +1.4 pct)
    • unadjusted cpi index 215.969 (cons 215.90) vs aug 215.834
    • energy +0.6 pct, gasoline +1.0 pct, new vehicles +0.4 pct
    • food -0.1 pct, housing unch, owners' equivalent rent -0.1 pct
    • core cpi seasonally adjusted index 220.053 vs aug 219.692
    • sept real earnings -0.4 pct (cons -0.1) vs aug -0.2 pct (prev -0.2 pct)
    • rent, owners' equivalent indexes both decline 0.1 pct, first drop since 1992
    •  year-over-year food -0.2 pct, first decline since april 1967
  • Empire State
    • ny fed's empire state index at 34.57 in oct (consensus 18.00), highest since may 2004, vs sept 18.88
    • employment index rises to +10.39 in oct from -8.33 in september
    • new orders index rises to 30.82 in oct from 19.84 in september
    • prices paid index rises to 19.48 in oct from 20.24 in september
    • six-month business conditions index rises to 55.69 in oct from 52.29 in sept
    • employment index in positive territory for first time since june 2008
    • 6-month business outlook index at highest since oct 2004
    • new orders index at highest since august 2005

MBS and Tsy's are understandably worse given the above raft of data that is generally economically bullish. The exception obviously would be in the inflation data which is very likely not hurting bonds.  All things considered, it doesn't look to be an incredibly steep price loss at the moment, though the time frames with which things can change are measured in NY minutes...  We'll let you know what's developing as AM trade progresses.  In short: we're down for now, have had support from 100-19 a few times, but would not be surprises to see losses worsen. 

MBS, Tsy, and LIBOR Quotes