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What's Up With The Paradoxical CPI Reaction?
What's Up With The Paradoxical CPI Reaction?
Heading into today's data, we knew there was a possibility of two separate reactions--one for the top line CPI numbers and one for a deeper look at the internal components. Those internals show that tariffs are having an impact even though it was a smaller impact than many forecasters were expecting. Bonds didn't seem to care at first. When a new glut of trades came online at the 9:30am NYSE open, that changed. Both stocks and bonds sold off sharply starting at 9:30am and this move looks far more convincing that the initial rally.
after CPI 10yr yields are down 2.9bps at 4.406 and MBS are up an eighth
10yr unchanged 4.434. MBS also unchanged and down just over an eighth from the highs.
weakness continues. MBS down 6 ticks (.19) and 10yr up 4.7 bps at 4.482
Steady, slight selling continues. MBS down 7 ticks (.22) and 10yr up 5.3bps at 4.488
What's Up With The Paradoxical CPI Reaction?
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Tuesday, Jul 15 | |||||
| 8:30AM | Jul NY Fed Manufacturing | Jul | 5.50 | -9 | -16.00 |
| 8:30AM | Jun y/y Headline CPI (%) | Jun | 2.7% | 2.7% | 2.4% |
| 8:30AM | Jun m/m Headline CPI (%) | Jun | 0.3% | 0.3% | 0.1% |
| 8:30AM | Jun y/y CORE CPI (%) | Jun | 2.9% | 3% | 2.8% |
| 8:30AM | Jun m/m CORE CPI (%) | Jun | 0.2% | 0.3% | 0.1% |
| 9:15AM | Fed Bowman Speech | ||||
| 12:00PM | NOPA Crush Report (%) | ||||
| 12:45PM | Fed Barr Speech | ||||
| 2:45PM | Fed Collins Speech | ||||
| 7:45PM | Fed Logan Speech | ||||
| Wednesday, Jul 16 | |||||
| 12:00AM | Roll Date - UMBS 15YR, Ginnie Mae 15YR | ||||
| 7:00AM | Jul/11 MBA Refi Index | Jul/11 | 829.3 | ||
| 7:00AM | Jul/11 MBA Purchase Index | Jul/11 | 180.9 | ||
| 8:30AM | Jun Producer Prices (%) | Jun | 0.2% | 0.1% | |
| 8:30AM | Jun Core Producer Prices MM (%) | Jun | 0.2% | 0.1% | |
| 8:30AM | Jun Core Producer Prices YY (%) | Jun | 2.7% | 3% | |
| 9:15AM | Jun Industrial Production (%) | Jun | 0.1% | -0.2% | |
| 9:15AM | Fed Hammack Speech | ||||
| 10:00AM | Fed Barr Speech | ||||
| 10:30AM | Jul/11 Crude Oil Inventory (ml) | Jul/11 | 7.07M | ||
| 2:00PM | Fed Beige Book | ||||
| 6:30PM | Fed Williams Speech | ||||
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