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Ugly Snowball Selling Thanks to Oil and Inflation Data
Ugly Snowball Selling Thanks to Oil and Inflation Data
MBS lost nearly a full point by 4pm ET and 10yr yields were up 11.4bps at 4.95%. This is the highest since October 2023 when 10s briefly hit 5.006%. At one point in the overnight session, yields were slightly LOWER on the day. Things changed in waves. First wave: oil prices surged overnight and had already broken $100 but the time PPI came out. Second wave: PPI was roughly in line with forecasts, but internal components suggested a 0.1 increase to core PCE inflation. The reaction was the sharpest of the day for bonds. Third wave: late day illiquid redistribution after 30yr bond auction (although this could also be incidental drift ahead of Friday's CPI data). If we could only focus on 2 things, it would be the acceleration in the fuel price trend and the unfriendly PCE implications in today's PPI data.
Ugly Snowball Selling
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Friday, Sep 11 | |||||
| 12:00AM | Roll Date - UMBS 30YR | ||||
| 8:30AM | Aug y/y Headline CPI (%) | Aug | 3.4% | 3.4% | 3.4% |
| 8:30AM | Aug m/m CORE CPI (%) | Aug | 0.3% | 0.2% | 0.2% |
| 8:30AM | Aug m/m Headline CPI (%) | Aug | 0.4% | 0.4% | 0.1% |
| 8:30AM | Aug y/y CORE CPI (%) | Aug | 2.4% | 2.4% | 2.5% |
| 10:00AM | Sep Consumer Sentiment (ip) | Sep | 51 | 51.7 | |
| 10:00AM | Sep Sentiment: 1y Inflation (%) | Sep | 4% | ||
| 10:00AM | Sep Sentiment: 5y Inflation (%) | Sep | 3.3% | ||
| 10:00AM | Sep U Mich conditions | Sep | 51.3 | 51.9 | |
| 12:00PM | WASDE Report (%) | ||||
| 2:00PM | Aug Federal budget (bl) | Aug | $-404B | $-432B | |
| Monday, Sep 14 | |||||
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