Mixed, But Modestly Stronger Reaction to CPI
Mixed, But Modestly Stronger Reaction to CPI
CPI came out just a bit lower than expected with the monthly core at 0.2 vs 0.3 and annual core at 2.6 vs 2.7. The unrounded numbers were closer to forecasts and headline inflation was unchanged from last month. All that to say that there was no major directional suggestion for rates in today's data. It's best use is to confirm that inflation is roughly where we left it before data collection got wonky surrounding the shutdown. Bonds are definitely stronger than they were before the data, but the gains have been choppy and fairly small so far.
Stronger after CPI data. MBS up just over a quarter point and 10yr down 1.6bps at 4.16
Choppy after initial rally but still slightly stronger. MBS up 5 ticks (.16) and 10yr down half a bp at 4.173
30yr auction 4.825 vs 4.833 f'cast. Bid to cover 2.42 vs 2.38 avg. No major reaction. 10yr down 1.1bps at 4.167 and MBS off weakest levels, up 5 ticks (.16) on the day.
Incidental Weakness Ahead of CPI Data
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Tuesday, Jan 13 | |||||
| 12:00AM | Roll Date - UMBS 30YR | ||||
| 6:00AM | Dec NFIB Business Optimism Index | Dec | 99.5 | 99.5 | 99.0 |
| 8:15AM | ADP Employment Change Weekly | 11.75K | 11.5K | ||
| 8:30AM | Dec y/y Headline CPI (%) | Dec | 2.7% | 2.7% | 2.7% |
| 8:30AM | Dec m/m Headline CPI (%) | Dec | 0.3% | 0.3% | |
| 8:30AM | Dec y/y CORE CPI (%) | Dec | 2.6% | 2.7% | 2.6% |
| 8:30AM | Dec m/m CORE CPI (%) | Dec | 0.2% | 0.3% | |
| 10:00AM | Jan IBD economic optimism | Jan | 47.2 | 48.2 | 47.9 |
| 1:00PM | 30-Yr Bond Auction (bl) | 22 | |||
| 1:00PM | 30-Year Bond Auction | 4.825% | 4.773% | ||
| 2:00PM | Dec Federal budget (bl) | Dec | $-145B | $-150B | $-173B |
| Wednesday, Jan 14 | |||||
| 7:00AM | Jan/09 MBA Refi Index | Jan/09 | 937 | ||
| 7:00AM | Jan/09 MBA Purchase Index | Jan/09 | 159.3 | ||
| 7:00AM | Jan/09 Mortgage Market Index | Jan/09 | 270.8 | ||
| 8:30AM | Oct PPI YoY | Oct | 2.7% | ||
| 8:30AM | Oct Core Producer Prices MM (%) | Oct | 0.1% | ||
| 8:30AM | Oct Producer Prices (%) | Oct | 0.3% | ||
| 8:30AM | Nov Retail Sales (%) | Nov | 0.4% | 0% | |
| 8:30AM | Nov Retail Sales Control Group MoM | Nov | 0.4% | 0.8% | |
| 10:00AM | Oct Business Inventories (% ) | Oct | 0.2% | 0.2% | |
| 10:00AM | Dec Existing home sales (ml) | Dec | 4.2M | 4.13M | |
| 10:00AM | Dec Exist. home sales % chg (%) | Dec | 0.5% | ||
| 10:30AM | Jan/09 Crude Oil Inventory (ml) | Jan/09 | -2.2M | -3.831M | |
