Friday began with bonds reacting negatively to economic data that didn't seem to justify too much weakness. We discussed that briefly in the AM commentary and a more detailed discussion follows in today's recap video. The thesis is that, while we can come up with a few explanations to fit the movement, none of them really matter in the bigger picture. The market has yet to truly make its next move after rallying in response to November's CPI report. The weakness we're seeing this week could be an incidental byproduct of light holiday week volume and liquidity, or it could be a "lucky guess" among traders who think the correction from October rate highs has run enough of its course for now. Either way, we won't be able to know until January.
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- Durable Goods
- -2.1 vs -0.6 f'cast, 0.7 prev
- Nondefense, excluding aircraft
- 0.2 vs 0.0 f'cast, 0.3 prev
- Incomes
- 0.4 vs 0.3 f'cast, 0.7 prev
- Outlays
- 0.1 vs 0.2 f'cast, 0.9 prev
- Core PCE Price Index
- 4.7 vs 4.7 f'cast, 5.0 prev
- Durable Goods
paradoxically weaker after equivocal econ data. 10yr up almost 4bps at 3.725 and MBS down 7 ticks (.22).
Modest bounce heading into the 11am hour, but no traction after that. MBS down 6 ticks (.19) and 10yr yield up 6bps at 3.745.
MBS Market Alerts
