CPI data was a mixed bag for bonds. Top-line numbers fueled a quick rally and digestion of the details brought us back to negative territory (albeit with help from stronger S&P PMI data). Bonds found their footing shortly after 10am at just slightly stronger levels and then stayed mostly sideways through the close. Pretty ho-hum CPI day given all the anticipation...
Initially stronger after CPI data, but now turning red after PMI data. MBS unchanged and 10yr up 1.2bps at 4.013
01:51 PM
Crawling back into positive territory. MBS up an eighth and 10yr down 1.2bps at 3.99
04:40 PM
Heading out at just slightly stronger levels with MBS up an eight and 10yr yields down half a bp at 3.997
Lock / Float Considerations
Rates nudged just a bit higher over the past 2 days, regardless of the apparently friendly inflation data on Friday morning. This builds an ongoing case for current levels representing something of a floor, or at least a temporary hitching post on the path to wherever we're headed next. Next week's auctions and Fed press conference could help inform that path, but not in the same way that big-ticket econ data could.
