Bonds rallied overnight, largely in concert with lower EU yields. Stable inflation in Germany and lower oil prices helped. But there was also a tailwind from Fed Funds Futures which saw a further...
Most of the post-CPI gains are now erased. In fact, 10yr yields are at new highs for the day, up 1.7bps at 4.301. This reaction is more in line with the internal components addressed ...
There's something for everyone in this morning's CPI data. The monthly headline was on target at 0.2 vs 0.2. Same story for the core at 0.3 vs 0.3. Bonds are just a hair stronger, but it's hard t...
July represents the core of the summertime lull in financial markets. June and August are typically part of the lull unless econ data is suggesting an imminent shift in Fed policy. Th...
Any week in early August (before anyone is back to school yet) classifies a "dog days of summer" type of week for the bond market. Movement is more random. Ranges are narrower. And major technica...
30yr auction
4.813 vs 4.792 f'cast
bid to cover 2.27x vs 2.38x avg
lowest bid to cover since Nov 2023
This was not the auction we were hoping for in order for bonds t...
The week's last hope for any signs of life from economic data has come and gone with this morning's Jobless Claims. To be fair, there was never really much of a chance for this particular d...
10yr yields just spiked from 4.22 to 4.25 and MBS are down a quick quarter point. Negative reprices are quickly becoming possible. More on the underlying motivations to follow.
We don't want to jinx it, but this is turning out to be an uncommonly calm week of trading compared to other post-jobs-report trading weeks. So far, it's on track to have the narrowest rang...
The ISM Services Index is/was easily this week's biggest ticket in terms of scheduled economic data. It was mostly OK for bonds with the growth-related components coming in slightly weaker. But t...
Trade Gap (Jun)
-60.2B vs -61.6B f'cast, prev -71.5B
S&P Global Composite PMI (Jul)
55.1 vs 54.6 f'cast, prev 52.9
S&P Global Services PMI (Jul)
55.7 vs 5...
The new week is less interesting than the previous week in terms of scheduled events with the only top tier data being Tuesday's ISM Non Manufacturing PMI. In addition, the Treasury auction cycle...
Bonds started out flat but were in the midst of a mini-rally that accelerated at the 8:20am CME open. We've been selling fairly steadily since 8:30am and MBS are now down just over an eight...
Non-farm payrolls came in at 73k vs 110k, which is a pretty good thing for the bond market in and of itself. But the bigger story is in the net revisions to the last 2 months. 139k reported...
Average earnings mm (Jul)
0.3% vs 0.3% f'cast, prev 0.2%
Non Farm Payrolls (Jul)
73K vs 110K f'cast, prev 147K (rev 14K)
Participation Rate (Jul)
62.2% vs prev 62...
Bonds continue to slide amid month-end positioning. MBS are now unchanged on the day and down 6 ticks (.19) from the highs. Lenders are increasingly likely to be considering negative ...
Below is a table that consolidates the results of various econ reports as well as NFP precedents that speak to the odds of NFP moving higher or lower in tomorrow's data. Credit for this concept a...
Month-end positioning contributed to some weakness in the past half hour with 10yr yields just hitting their highs (still down 2 bps at 4.355). MBS are still up 2 ticks (.06) on the day but...
While jobless claims and the Employment Cost Index can be market movers, today's biggest ticket in the 8:30am slot was the monthly PCE Price Index for June. Forecasters are generally more accurat...
In not so many words, bonds aren't getting the dovishness they were hoping for from Powell. MBS just gave up all of the day's rebound and are back down 5 ticks (.16) on the day and 6 t...
No Change to Rates
Bowman and Waller dissented (expected)
No major verbiage changes
Bonds were already recovering AM losses ahead of the Fed announcement and they haven't moved much a...
Although swings in net exports have affected continue to affect the data, recent indicators suggest that growth of economic activity has continued to expand at a solid pace. moderated in t...
There were two key reports at the start of trading today. The 815am ADP data was fairly forgettable, coming in at 104k vs 75k f'cast, and -23k previously. This is well within a range ...
Core PCE Prices QoQ Final (Q2)
2.5% vs 2.3% f'cast, prev 3.5%
GDP (Q2)
3.0% vs 2.4% f'cast, prev -0.5%
GDP Deflator (Q2)
2.0% vs 2.2% f'cast, prev 3.8%
G...
ADP Employment
104k vs 75k f'cast, -23k prev
In addition to having about a 50% chance to correlate with the odds for the big jobs report to follow suit, ADP was only mildly stro...
There's no mistaking the fact that bonds are trading in a boring, narrowing, sideways range in the bigger picture, nor could anyone claim that today's trading does anything to change that fact.&n...
Given that a bilateral trade deal between the U.S. and EU was announced over the weekend, markets haven't moved much at all in response. 10yr yields were briefly lower overnight and are now incon...
Bonds were initially stronger, then weaker in the overnight session. There was a bit of additional selling in the first hour, but none of it corresponded with the 8:30am Durable Goods data....
Jobless claims data continues to defy a majority of other labor market metrics in showing a remarkable lack of any signs of softening. In fact, the 4 week average is now at a 13 week low.&n...
Take it with a grain of salt as it's being reported by the FT, but...
BRUSSELS COULD AGREE TO THE SO-CALLED RECIPROCAL LEVIES TO AVOID THE US PRESIDENT’S THREAT TO RAISE THEM TO 30 PER C...
The analytical theme this week has been to observe the market movement and then go scrambling for justification. Such is the nature of a week without any actionable econ data. This morning'...
While stock market volatility may be a drop in the bucket in the bigger picture, earnings season tends to increase volume and liquidity . This can spill over to the bond market in unpredic...
