Biggest Oil Spike Yet Leaves No Doubts
Biggest Oil Spike Yet Leaves No Doubts
Since the outbreak of the military operation in Iran, there have been varying levels of spillover from rising oil prices to the bond market. There have been notable pockets of time where the correlation broke down, but when viewed in less granular detail, oil prices and bond yields have moved higher together over the past week. Now this morning, there's a new mega-surge in oil (presumably due to Iran's leadership announcement and its implications for more military escalation) and the correlation is undeniable when viewed over a short time period. Today's first chart shows there's no question of that short-term correlation. The second chart shows that the correlation is definitely not proportional.
Sharply weaker overnight with oil price spike. High yields of 4.21% in 10yr. Now up only 4.2bps at 4.171. MBS down just under a quarter point.
Off the weakest levels. MBS down an eighth and 10yr up 2.8bps at 4.157
Oil Impact Ultimately Shunned in Favor of Jobs Report Implications
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Monday, Mar 09 | |||||
| 11:00AM | Feb Consumer Inflation Expectations | Feb | 3% | 3.1% | |
| Tuesday, Mar 10 | |||||
| 6:00AM | Feb NFIB Business Optimism Index | Feb | 99.7 | 99.3 | |
| 8:15AM | ADP Employment Change Weekly | 12.75K | |||
| 10:00AM | Feb Exist. home sales % chg (%) | Feb | -8.4% | ||
| 10:00AM | Feb Existing home sales (ml) | Feb | 3.90M | 3.91M | |
| 1:00PM | 3-Yr Note Auction (bl) | 58 | |||
