- Employment Cost Index
- 0.9 v 0.9 f'cast, 0.9 prev
- GDP
- -0.3 vs +0.3 f'cast, 2.4 prev
- Core PCE QoQ
- 3.5 vs 3.3 f'cast, 2.6 prev
- GDP Final Sales
- -2.5 vs +3.3 prev
Bonds began the day slightly stronger, but are pulling back to negative territory after the GDP data. Although the headline was weaker, much of that was driven by a big jump in the trade deficit that traders can explain away as front-running tariff changes. Factoring out inventory changes, GDP was up 3.0%, which is just fine, obviously.
In addition, the 3.5 vs 3.3 result in QoQ PCE prices. This creates a strong possibility that the monthly PCE price data will be higher than expected at 10am this morning.
10yr yields are now up 2.5bps at 4.203 and MBS are down 2 ticks (0.06).
