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Another Solid Start, But Without as Much Help From Oil
Another Solid Start, But Without as Much Help From Oil
Until the end of the Iran war, bond traders are keeping oil prices on their screens and comparing oil price movement against bond market movement as the first task on the daily checklist. In so doing, we see a bit of outperformance on the part of bonds this morning. While there is solid directional correlation (i.e. yields and oil were moving in the same directions at the same times), bond yields are lower today while oil is still a bit higher. Surprisingly, today's highest minute of volume happened with the 8:15am ADP data which showed its biggest drop in months. That said, there was not a big reaction in yields. The easiest conclusion for now is that bonds are taking some solace in an absence of big, new surges in oil prices as well as some supportive cues from the 4.30% bounce seen last Friday.
initially weaker overnight, then steadily stronger. MBS up 3 ticks (.09) and 10yr down 1bp at 4.21
Near best levels. MBS up 5 ticks (.16) and 10yr down 3bps at 4.19
Off best levels. MBS up 3 ticks (.09) and 10yr down 1.9bps at 4.20
Simple, Strong Correlation With Oil Leaves Yields Lower
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Tuesday, Mar 17 | |||||
| 8:15AM | ADP Employment Change Weekly | 9K | 15.5K | ||
| 10:00AM | Feb Pending Home Sales (%) | Feb | 1.8% | -0.5% | -0.8% |
| 11:30AM | 6-Week Bill Auction (%) | 3.635% | 3.635% | ||
| 1:00PM | 20-Yr Bond Auction (bl) | 13 | |||
| Wednesday, Mar 18 | |||||
| 12:00AM | Roll Date - Ginnie Mae 30YR | ||||
| 7:00AM | Mar/13 Mortgage Market Index | Mar/13 | 389.6 | ||
| 7:00AM | Mar/13 MBA Refi Index | Mar/13 | 1646.3 | ||
| 7:00AM | Mar/13 MBA Purchase Index | Mar/13 | 171.3 | ||
| 8:30AM | Feb PPI y/y | Feb | 2.9% | 2.9% | |
| 8:30AM | Feb Core PPI m/m (%) | Feb | 0.3% | 0.8% | |
| 8:30AM | Feb PPI m/m (%) | Feb | 0.3% | 0.5% | |
| 10:00AM | Jan Factory orders mm (%) | Jan | 0.1% | -0.7% | |
| 10:30AM | Mar/13 Crude Oil Inventory (ml) | Mar/13 | 0.4M | 3.824M | |
| 2:00PM | Interest Rate Projection - 2nd Yr | 3.1% | |||
| 2:00PM | Interest Rate Projection - 1st Yr | 3.4% | |||
| 2:00PM | Interest Rate Projection - Current | 3.6% | |||
| 2:00PM | Interest Rate Projection - Longer | 3% | |||
| 2:00PM | FOMC Economic Projections | ||||
| 2:00PM | Fed Interest Rate Decision | 3.75% | 3.75% | ||
| 2:30PM | Fed Press Conference | ||||
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