Fairly Big Sell-Off, But Last Week’s Range is Intact

Bonds dealt with a trifecta of unfriendly economic data today with slightly stronger Retail Sales leading the charge.  Jobless claims and Philly Fed certainly didn’t help.  In the desert of data that exists between each month’s jobs reports, only a handful of days stand out as potential sources of course correction.  Today was one of them and the 8bp sell-off in 10yr yields confirms it.  Despite that reasonably big jump, yields are still under last week’s highs.  That’s a decent consolation prize–one that suggests the market will remain willing to rally if it sees cracks in the next round of relevant data.

Econ Data / Events

Philly Fed

10.3 vs 3.0 f’cast

Retail Sales

0.4 vs 0.3 f’cast

Jobless Claims

241k vs 260k f’cast

Industrial Production

-0.3 vs -0.2 f’cast, 0.3 prev

Builder Confidence

43 vs 42 f’cast, 41 prev

Market Movement Recap

08:52 AM modestly weaker overnight with additional losses after data.  MBS down 6 ticks (.19).  10yr up 5.3bps at 4.067

10:34 AM Slowly and steadily weaker.  MBS down 10 ticks (.31) and 10yr up 7.4bps at 4.088

02:55 PM Treading water at weakest levels.  MBS down just over 3/8ths and 10yr up 8.1bps at 4.095