MBS Day Ahead: First and Only Major Econ Data of The Week

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Posted To: MBS Commentary

Bond markets are beginning the day slightly stronger ahead of the week's only significant economic data. The 8:30am time slot brings Retail Sales (expected at +0.7) and Producer Prices (core year-over-year expected to drop from 1.6 to 1.5). 10am brings the arguably less important Consumer Sentiment, expected at 98.5. Yesterday's recap provided a fairly thorough assessment of a few competing ideologies regarding the current tone in bond markets. In a nutshell, it said that some analysts were freaked out about yesterday. Others thought it was strong. I was personally a bit indifferent, seeing the afternoon weakness as a logical pull-back after traders bet fairly heavily on another exceptionally strong Treasury auction. Translating the analysis to bond yields , it adds up to ongoing resistance…(read more)

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