Markets continue trying to sort out the prospects for a recovery vs the risk of covid-19 resurgence. Today's battle was between super strong Retail Sales data and disconcerting covid headlines for a few US states as well as Beijing.
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11:30-11:50 AM (ET) - Fed 30yr UMBS Buying
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Retail Sales:+17.7 vs +8.0 f'cast, -14.7 prev
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NAHB Builder Confidence: 58 vs 45 f'cast, 37 prev
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Industrial Production: +1.4 vs +2.9 f'cast, -12.5 prev
Stocks and bond yields higher overnight. Follow-through trading on yesterday's corporate bond buying announcement from Fed. Also, talk of $1 trillion infrastructure bill. 10yr yield up 3bps to start the day (.75%).
Stocks surging and bond yields rising on super strong Retail Sales data. MBS look like they're still asleep with no discernible reaction so far.
Stronger NAHB may not have helped, but markets focused more on Powell saying "near a bottom" and "beginning the 2nd phase of the re-opening." Yields at the highs. MBS near lows.
Losses reversed course on a variety of COVID-related headlines, although Powell was also saying more sobering things about the economy around the same time.
Uneventful afternoon so far with bonds sideways at slightly weaker levels, but well inside the highs/lows discussed in the past 2 updates.
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