Boring Week and Next Week Isn’t Much More Promising

It’s always a bit jarring to go from something like last Friday’s jobs report response to a subsequent week with very little movement, but in the grand scheme of things, it may as well have been a 9 day weekend.  Actually, make that a 10 day weekend with the upcoming Monday being a holiday closure.  Neither PPI nor Consumer Sentiment caused a stir today, but volume suggests traders were willing to react to PPI if it had fallen far from forecasts.  In general, we’ll need big ticket data to say bad things about the economy in order to recover any decent amount of what was recently lost.  To that end, we’re waiting all the way until next Thursday morning for the next round of reasonably relevant reports. 

Econ Data / Events

M/M Core PPI

0.2 vs 0.2 f’cast, 0.3 prev

Y/Y Core PPI

2.8 vs 2.7 f’cast, 2.4 prev

Consumer Sentiment

68.9 vs 79.8 f’cast, 70.1 prev

1yr inflation expectations

2.9 vs 2.7 prev

5yr inflation expectations

3.0 vs 3.1 prev

Market Movement Recap

08:59 AM slightly weaker overnight with some additional losses after data.  MBS down an eighth and 10yr up 3.7bps at 4.098

01:09 PM Back near unchanged in MBS, best levels of the day.  10yr up only 1.1bps at 4.072

03:51 PM Not far from previous update.  MBS down 2 ticks (.06) and 10yr up 1.8bps at 4.079