Friday ended up being a slightly stronger session for bonds, but not in any impressive way. Moreover, it wasn't remotely strong enough to undo the damage seen yesterday. The overall takeaway is that it is strong economic data more than anything that is keeping the upward pressure on rates right now. Things may have looked completely different had we not seen lower jobless claims and higher GDP on Thursday. The other takeaway is that it's not just inflation data that matters. In fact, it's telling that Friday's PCE and ECI data (both inflation-focused) argued for a rally, but bonds mostly lost ground after the data came out.
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- Core PCE Prices
- 0.2 vs 0.2 m/m
- 4.1 vs 4.2 y/y
- Employment Cost Index (ECI)
- 1.0 vs 1.1 f'cast, 1.2 prev
- Consumer Sentiment
- 71.6 vs 72.6 f'cast
- Core PCE Prices
No reaction to econ data. stronger overnight, but slipping now. 10yr down only 1.5bps at 3.987. MBS up 6 ticks (.19).
recovering back toward AM highs with MBS up just over a quarter point. 10yr yield down 3.3bps at 3.969.
Drifting to best levels in late trading. 10yr down 2.7bps at 4.013. MBS up 3/8ths.
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