MBS OPEN: Lots of 8:30AM Data, Mixed Reactions

By: Matthew Graham •

 

Econ Data Releases

  • INCOME AND OUTLAYS
    • PERSONAL SPENDING -0.5 PCT (CONSENSUS -0.5) VS AUG +1.4 PCT (PREV +1.3)
      • PERSONAL INCOME UNCH (CONS UNCH) VS AUG +0.1 PCT (PREV +0.2)
      • CORE PCE PRICE INDEX +0.1 PCT (+0.1247; CONS +0.2) VS AUG +0.1 PCT (PREV +0.1)
      • OVERALL PCE PRICE INDEX +0.1 PCT (+0.1186) VS AUG +0.3 PCT (PREV +0.3)
      • YEAR-OVER-YEAR PCE PRICE INDEX -0.5 PCT (AUG -0.5 PCT), CORE +1.3 PCT (AUG +1.3 PCT)
      • REAL CONSUMER SPENDING -0.6 PCT VS AUG +1.0 PCT (PREV +0.9)
      • PERSONAL SAVING RATE 3.3 PCT VS AUG 2.8 PCT
      • MKT-BASED PCE PRICE INDEX +0.1 PCT (AUG +0.4 PCT), CORE +0.1 PCT (AUG +0.1 PCT)
      • MKT-BASED YR-OVER-YR PCE PRICE INDEX -0.5 PCT, CORE +1.6 PCT

 

  • EMPLOYMENT COST INDEX
    • +0.4 PCT (CONSENSUS +0.4 PCT) VS Q2 +0.4 PCT (PREV +0.4 PCT)
      • WAGES/SALARIES +0.4 PCT VS Q2 +0.4 PCT (PREV +0.4 PCT)
      • BENEFIT COSTS +0.4 PCT VS Q2 +0.3 PCT (PREV +0.3 PCT)
      • YEAR-OVER-YEAR EMPLOYMENT COSTS +1.5 PCT, LOWEST ON RECORD
      • YEAR-OVER-YEAR WAGES/SALARIES +1.5 PCT, LOWEST ON RECORD
      • YEAR-OVER-YEAR BENEFIT COSTS +1.6, LOWEST ON RECORD
  • ISM/NY
    • CURRENT BUSINESS CONDITIONS INDEX FALLS TO 60.8 IN OCT FROM SEPT'S 72.9
    • NEW YORK CITY BUSINESS CONDITIONS INDEX RISES TO 377.9 IN OCT FROM 372.5 IN SEPT
    • 6-MONTH OUTLOOK INDEX FALLS TO 68.9 IN OCT FROM 69.5 IN SEPT

As you can see on the chart, even before the data was released this AM, we'd seen some improvements.  In tsy's, these came even more readily than MBS with the 10yr up 14 ticks to MBS's 7 tick gain.  This puts the 10yr at 3.443, and the Fannie 4.5 at 101-00 even.  More data to come, but so far, bonds are happy.  But the day isn't over yet...

Yesterday's Recap

  • The 10yr had a hard time getting under 3.48 yesterday.  Ok, to be fair, it had "no time" getting under 3.48 as it never happened. 
  • The AM data in the form of GDP and Jobless Claims were supportive of stocks and not so supportive for bonds, or was it?
  • Equally strong case being made for a "return to the range"
  • 7yr auction did nothing to suggest bonds stay in the better parts of the range that followed Wednesday's auction. 

Yet To Come...

  • Only two pieces of econ data to speak of: Chicago PMI at 945 and Consumer Sentiment at 955.