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PPI Reaction Playing Out Better Than CPI So Far
PPI Reaction Playing Out Better Than CPI So Far
Tuesday's CPI reaction was frustrating. Bonds rallied for an hour only to sell off for the rest of the day starting at 9:30am. Things are off to a different sort of start today. PPI was a bit lower than expected and didn't immediately suggest a major tariff impact in the same way as some of the categories in yesterday's CPI. Imports themselves are not included in PPI, but if a domestic producer raises prices on something with tariffed components, tariffs would effectively be responsible for the increase unless the producer had a separate reason to raise prices. Bottom line: it was easy to see tariffs spilling over to several CPI categories yesterday, thus the reversal, but the worst offenders in today's PPI are distinctly domestic. This likely the reason we haven't seen a similar reversal of the initial headline reaction (which was a modest rally).
Slightly stronger after PPI. MBS up 3 ticks (.09) and 10yr down 2.4bps at 4.46
Bonds selling off on headlines regarding Trump considering firing Powell. MBS now unchanged on the day and 10yr nearly unchanged at 4.48
What's Up With The Paradoxical CPI Reaction?
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Wednesday, Jul 16 | |||||
| 12:00AM | Roll Date - UMBS 15YR, Ginnie Mae 15YR | ||||
| 7:00AM | Jul/11 MBA Refi Index | Jul/11 | 767.6 | 829.3 | |
| 7:00AM | Jul/11 MBA Purchase Index | Jul/11 | 159.6 | 180.9 | |
| 8:30AM | Jun Producer Prices (%) | Jun | 0% | 0.2% | 0.1% |
| 8:30AM | Jun Core Producer Prices MM (%) | Jun | 0% | 0.2% | 0.1% |
| 8:30AM | Jun Core Producer Prices YY (%) | Jun | 2.6% | 2.7% | 3% |
| 9:15AM | Jun Industrial Production (%) | Jun | 0.3% | 0.1% | -0.2% |
| 9:15AM | Fed Hammack Speech | ||||
| 10:00AM | Fed Barr Speech | ||||
| 10:30AM | Jul/11 Crude Oil Inventory (ml) | Jul/11 | -3.859M | -0.9M | 7.07M |
| 2:00PM | Fed Beige Book | ||||
| 6:30PM | Fed Williams Speech | ||||
| Thursday, Jul 17 | |||||
| 8:30AM | Jun Retail Sales (%) | Jun | 0.1% | -0.9% | |
| 8:30AM | Jul/12 Jobless Claims (k) | Jul/12 | 235K | 227K | |
| 8:30AM | Jun Retail Sales (ex-autos) (%) | Jun | 0.3% | -0.3% | |
| 8:30AM | Jul Philly Fed Business Index | Jul | -1 | -4.0 | |
| 8:30AM | Jul/05 Continued Claims (ml) | Jul/05 | 1970K | 1965K | |
| 8:30AM | Jun Import prices mm (%) | Jun | 0.3% | 0% | |
| 8:30AM | Jun Export prices mm (%) | Jun | 0% | -0.9% | |
| 8:30AM | Jul Philly Fed Prices Paid | Jul | 41.40 | ||
| 8:30AM | Jun Retail Sales Control Group MoM | Jun | 0.3% | 0.4% | |
| 10:00AM | May Business Inventories (% ) | May | 0% | 0% | |
| 10:00AM | Jul NAHB housing market indx | Jul | 33 | 32 | |
| 10:00AM | Fed Kugler Speech | ||||
| 1:30PM | Fed Cook Speech | ||||
| 6:30PM | Fed Waller Speech | ||||
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