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MBS Fully Recover After Initial Reaction to Inflation Data
MBS Fully Recover After Initial Reaction to Inflation Data
There's no question that this morning's PPI data hit the bond market. The volume spike was easily higher than that seen with yesterday's CPI and the market movement left nothing to the imagination. In the big picture, a few bps of weakness in bond yields isn't that alarming, but if we consider PPI isn't usually a big deal and that yields were already pushing recent highs, things begin looking more meaningful. Despite the initial reaction, bonds found their footing after 11:30am. 10yr yields made it almost all the way back to pre-data levels and MBS fared even better--ultimately turning green around 2pm.
Highest Yields in 10 Months But Not Because of CPI
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Wednesday, May 13 | |||||
| 7:00AM | May/08 MBA Refi Index | May/08 | 921.1 | 928.6 | |
| 7:00AM | May/08 MBA Purchase Index | May/08 | 177.7 | 171.1 | |
| 7:00AM | May/08 Mortgage Market Index | May/08 | 290.1 | 285.3 | |
| 8:30AM | Apr PPI y/y | Apr | 6% | 4.9% | 4% |
| 8:30AM | Apr Core PPI m/m (%) | Apr | 1% | 0.3% | 0.1% |
| 8:30AM | Apr Core PPI y/y (%) | Apr | 5.2% | 4.3% | 3.8% |
| 8:30AM | Apr PPI m/m (%) | Apr | 1.4% | 0.5% | 0.5% |
| 10:30AM | May/08 Crude Oil Inventory (ml) | May/08 | -4.306M | -2.10M | -2.314M |
| 11:30AM | Fed Collins Speech | ||||
| 1:00PM | 30-Year Bond Auction | 5.046% | 4.876% | ||
| 1:00PM | 30-Yr Bond Auction (bl) | 25 | |||
| 1:15PM | Fed Kashkari Speech | ||||
| 7:00PM | Fed Logan Speech | ||||
| Thursday, May 14 | |||||
| 8:30AM | Apr Import prices mm (%) | Apr | 1.0% | 0.8% | |
| 8:30AM | May/09 Jobless Claims (k) | May/09 | 205K | 200K | |
| 8:30AM | May/02 Continued Claims (k) | May/02 | 1790K | 1766K | |
| 8:30AM | Apr Retail Sales Control Group MoM | Apr | 0.4% | 0.7% | |
| 8:30AM | Apr Retail Sales (%) | Apr | 0.5% | 1.7% | |
| 10:00AM | Mar Business Inventories (% ) | Mar | 0.8% | 0.4% | |
| 1:00PM | Fed Hammack Speech | ||||
| 5:45PM | Fed Williams Speech | ||||
| 7:00PM | Fed Barr Speech | ||||
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