A Clear Reaction to Data Without Any Major Drama

After this morning’s initial reaction to Initial Jobless Claims, the rest of the day was uneventful and sideways.  By 9:00am, 10yr yields had risen about 4bps to 3.866–which was the exact same level seen at the 3pm close.  MBS outperformed in day over day terms, but had a distinct moment of underperformance just after 3pm.  From here, we get into consistent daily doses of big ticket econ data culminating in next Friday’s jobs report.  Volatility potential is increasing accordingly.

Econ Data / Events

Jobless Claims

231k vs 232k f’cast, 233k prev

Continued Claims

1868k vs 1870k f’cast

GDP 

3.0 vs 2.8 f’cast, 

GDP Deflator

2.5 vs 2.3 f’cast, 3.1 prev

Core PCE Prices (q/q annualized)

2.8 vs 2.9 f’cast

Market Movement Recap

08:48 AM Modestly stronger overnight but losing ground after 8:30am data.  MBS down 2 ticks (.06) and 10yr up 3bps at 3.866.

11:20 AM weakest levels with MBS down an eighth and 10yr up 4.3bps at 3.879

02:34 PM small rally in PM hours.  MBS down only 2 ticks and 10yr up 2.9bps at 3.864

04:51 PM Off the weakest levels heading into the close with MBS down 3 ticks (.09) and 10yr yields up 2.7bps at 3.863