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Mixed Data Making For Weaker Start
Mixed Data Making For Weaker Start
Today is the only day of the week with any economic reports that are relevant to bond market movement. The results are in, and bonds aren't thrilled. Jobless Claims and the Philly Fed headline helped initially. Yields moved back to unchanged levels after some overnight weakness, but the higher inflation component in Philly Fed was already making for second thoughts before the 9:45am S&P PMI data added fuel to the unfriendly reversal. In addition to Manufacturing PMI surging higher, the bigger story is the reported tariff-driven price increases: "Tariffs were reported as the key driver of further cost increases in August. Companies reported the steepest rise in input prices since May and the second-largest increase since January 2023. The manufacturing cost rise was especially large, being the second-steepest since August 2022, the service sector increase was the second-highest since June 2023." Bonds moved to their weakest levels of the morning after that data.
MBS are now down only 1 tick (.03) and 10yr yields are close to unchanged at 4.296 after being over 4.315 just before the data.
10yr yields are back up to 4.312 (up 1.8bps on the day) and MBS are down 3 ticks (.09) on the day.
Weakest levels after PMI data. MBS down an eighth and 10yr up 3.3bps at 4.328
MBS down 5 ticks (.16) on the day 10yr yields up 4.5bps on the day at 4.35. Fed's Hammack comments are the driver of the most recent weakness
Almost No Reaction to Fed Minutes
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Thursday, Aug 21 | |||||
| 7:30AM | Fed Bostic Speech | ||||
| 8:30AM | Aug/16 Jobless Claims (k) | Aug/16 | 235K | 225K | 224K |
| 8:30AM | Aug Philly Fed Business Index | Aug | -0.3 | 7 | 15.9 |
| 8:30AM | Aug Philly Fed Prices Paid | Aug | 66.80 | 58.80 | |
| 8:30AM | Aug/09 Continued Claims (k) | Aug/09 | 1972K | 1960K | 1953K |
| 9:45AM | Aug S&P Global Composite PMI | Aug | 55.4 | 55.1 | |
| 9:45AM | Aug S&P Global Manuf. PMI | Aug | 53.3 | 49.5 | 49.8 |
| 9:45AM | Aug S&P Global Services PMI | Aug | 55.4 | 54.2 | 55.7 |
| 10:00AM | Jul CB Leading Index MoM (%) | Jul | -0.1% | -0.1% | -0.3% |
| 10:00AM | Jul Existing home sales (ml) | Jul | 4.01M | 3.92M | 3.93M |
| 10:00AM | Jul Exist. home sales % chg (%) | Jul | 2% | -2.7% | |
| 1:00PM | 30-Yr Bond Auction (bl) | 8 | |||
| 8:00PM | Jackson Hole Symposium | ||||
| Friday, Aug 22 | |||||
| 10:00AM | Fed Chair Powell Speech | ||||
| 8:00PM | Jackson Hole Symposium | ||||
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