Uneventful Afternoon After Strong Data Sends Yields Higher

Today's key development was the duo of much stronger economic reports at 8:30am (Philly Fed and Retail Sales).  Indeed, this accounted for the only interesting moments of the day.  5 minutes later, both MBS and Treasuries weakened to levels that persisted through the 3pm CME close.  Bottom line: quick adjustment due to the data and then a sideways grind that reinforced the broader sideways-to-slightly-weaker range.

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • Retail Sales 0.7 vs -0.8 f'cast, -1.1 prev

  • Jobless Claims 332k vs 330k f'cast

  • Philly Fed Index 30.7 vs 18.8 f'cast

Market Movement Recap
08:35 AM

flat in Asia, then inconsequentially higher in yield during European hours, but losing ground quickly after significantly stronger data (Retail Sales and Philly Fed).  10yr yields up 3.4bps at 1.338 and MBS down .19 (6 ticks)

02:04 PM

Sideways and uneventful trading all day following this morning's sell-off.  Surprisingly calm and boring... MBS down roughly a quarter of a point and 10yr yields up 2.7bps at 1.331.

03:49 PM

Still sideways after the 3pm CME close with 10yr and MBS both trading at the same levels seen 3 minutes after this morning's econ data.