Mixed Reaction to Retail Sales Makes For a Boring Monday
Mon, Mar 17 2025, 4:12 PM
MBS Recap
Mixed Reaction to Retail Sales Makes For a Boring Monday
MBS Recap Matthew Graham | 4:12 PM
Mixed Reaction to Retail Sales Makes For a Boring Monday
Despite coming in much weaker than expected, Retail Sales (the day's only big-ticket market mover) didn't provide much help for bonds. The catch was that the key internal component (the control group, aka retail sales excluding autos/gas/building materials) was stronger than expected. Bonds lost ground on the news, but began to rally about 30 minutes later. The net effect was essentially a restoration of Friday's average mid-day trading levels, thus making for a ho-hum Monday.
Weaker after retail sales, but a hair stronger on the day. MBS up 1 tick (.03) and 10yr down 0.2bps at 4.311.
12:28 PM
Nice recovery for reasons unknown (some big trades at 9:20am, but that's about it). MBS up 5 ticks (.16) and 10yr down 4.8bps at 4.265
03:31 PM
Losing some ground in the PM hours, but still slightly stronger. MBS up 2 ticks (.06) and 10yr down 0.6bps at 4.307
Lock / Float Considerations
Bonds/rates have generally been in consolidation mode after hitting the best levels in early March. That's been mostly a sideways affair, but a breakout in either direction is possible. The biggest risk/opportunity on the near term horizon is Wednesday afternoon's Fed announcement (not due to rate cuts, which are a 0% chance, but instead due to the dot plot). Stock/bond correlation has been hit and miss.
