Straightforward Gains After Important Inflation Data
Fri, Jul 26 2024, 6:04 PM
MBS Recap
Straightforward Gains After Important Inflation Data
MBS Recap Matthew Graham | 5:53 PM
Straightforward Gains After Important Inflation Data
While today's monthly core PCE headline may have technically been higher than the median forecast, a vast majority of forecasters abstained from submitting updated guesses to data aggregators after yesterday's quarterly PCE data. Had they been compelled to do so, the forecast would almost certainly have risen to 0.2 from 0.1 and today's unrounded number of 0.182 would be the logical beat that the market traded... logically. In fact, one might call the 2 day action "boring" considering this morning's quick PCE-driven rally almost perfectly offset yesterday's PCE-driven sell-off and neither was very big in the bigger picture.
10s are down 2.6bps at 4.218 and MBS are up 2 ticks (.06).
12:11 PM
Mostly sideways after initial rally. MBS up 6 ticks (.19) and 10yr down 3.7bps at 4.207
02:28 PM
Flat at same strong levels. MBS up 7 ticks (.22) and 10yr down 4.3bps at 4.201.
05:50 PM
10yr out the door down 4.7bps at 4.196 and MBS ended up just over a quarter point.
Lock / Float Considerations
Friday's PCE victory helps set a range ceiling for now. It's all the way up at 4.29 in terms of 10yr yields, so it gives risk takers some room to play the range. As always, there's no way to know which way things will go next week--only that the stakes are higher. Monday is uncommon in the sense that the only major market mover (Treasury refunding estimates) comes out in the afternoon. Volatility potential increases throughout the week with the Fed on Wednesday and the jobs report on Friday.
