Straightforward Gains After Important Inflation Data

While today’s monthly core PCE headline may have technically been higher than the median forecast, a vast majority of forecasters abstained from submitting updated guesses to data aggregators after yesterday’s quarterly PCE data.  Had they been compelled to do so, the forecast would almost certainly have risen to 0.2 from 0.1 and today’s unrounded number of 0.182 would be the logical beat that the market traded… logically.  In fact, one might call the 2 day action “boring” considering this morning’s quick PCE-driven rally almost perfectly offset yesterday’s PCE-driven sell-off and neither was very big in the bigger picture.  

Econ Data / Events

Core M/M PCE

0.2 vs 0.1 f’cast, 0.1 prev
(unrounded = 0.182%)

Core Y/Y PCE

2.6 vs 2.5 f’cast, 2.6 prev

Incomes

0.2 vs 0.4 f’cast, 0.4 prev

Outlays

0.3 vs 0.3 f’cast, 0.4 prev

Consumer Sentiment

66.4 vs 66.0 f’cast, 68.2 prev

Market Movement Recap

08:40 AM 10s are down 2.6bps at 4.218 and MBS are up 2 ticks (.06).

12:11 PM Mostly sideways after initial rally.  MBS up 6 ticks (.19) and 10yr down 3.7bps at 4.207

02:28 PM Flat at same strong levels.  MBS up 7 ticks (.22) and 10yr down 4.3bps at 4.201.

05:50 PM 10yr out the door down 4.7bps at 4.196 and MBS ended up just over a quarter point.