2 Straight Days of Gains?!

Not only have bonds managed to pull off a feat rarely seen in recent memory (back to back days of solid gains), but the total drop in yields is the biggest since August 2024.  Today’s improvement wasn’t nearly as big as yesterday’s CPI-driven rally, but it would have been very strange if it had been.  The data and events on tap didn’t have the street cred to drive such craziness.  Modestly weaker retail sales helped yields level off after overnight weakness, but comments from Fed’s Waller and Treasury Secretary nominee Bessent accounted for most of the day’s downward movement in yields. 

Econ Data / Events

Retail Sales

0.4 vs 0.6 f’cast, 0.7 prev

Retail Sales excluding autos

0.4 vs 0.4 f’cast, 0.2 prev

Jobless Claims

217k vs 210k f’cast, 201k prev

Continued Claims

1.859m vs 1.870m f’cast, 1.867m prev

Philly Fed Index

44.3  vs -5 f’cast, -16.4 prev

Market Movement Recap

10:01 AM Slightly weaker overnight with a bit of a recovery after the data.  MBS down only 1 tick (.03) and 10yr up 1.8bps at 4.671

11:53 AM Additional gains after Waller comments and Bessent confirmation comments.  10yr down 4.2bps at 4.611.  MBS up a quarter point.

02:57 PM MBS up 6 ticks (.19) and 10yr down 4.4bps at 4.608