Some Pros and Cons in Today's Weakness

Bonds lost ground today, but it wasn't necessarily an unequivocally bad day. Yields were close to yesterday's lows just before this morning's PCE data came out and only moved higher after that. If the data had been better, it's possible today could have started on a stronger note. Oil price volatility was the other notable factor with prices moving up roughly $3 between 5am and noon ET. In light of both of those headwinds, bonds actually lost minimal ground and managed to hold below yesterday's high yields with multiple ceiling bounces at 4.67% in the 10yr. If we see weaker data and lower oil prices ahead, there's no reason to think bonds couldn't challenge this week's best levels again.

Econ Data / Events
    • Core PCE (m/m) (Jul)
      • 0.2% vs 0.2% f'cast, 0.1% prev
    • Core PCE (y/y) (Jul)
      • 3.3% vs 3.3% f'cast, 3.3% prev
    • Durable goods (Jul)
      • 1.1% vs 0.5% f'cast, 0.3% prev
    • GDPQ2
      • 1.5% vs 1.5% f'cast, 2.1% prev
    • PCE (y/y) (Jul)
      • 3.7% vs 3.6% f'cast, 3.7% prev
    • PCE prices (m/m) (Jul)
      • 0.2% vs 0.1% f'cast, -0.1% prev
Market Movement Recap
09:15 AM

Weaker after PCE data. MBS down 6 ticks (.19) and 10yr up 2.4bps at 4.654

12:05 PM

MBS down a quarter point and 10yr up 3.5bps at 4.664

02:28 PM

Unchanged from previous update