MBS RECAP: The Return of Logical Economic Cause & Effect?

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Posted To: MBS Commentary

We've seen plenty of instances of bond markets shrugging off clear suggestions in the economic data, but today wasn't one of them! Retail Sales and GDP tracking weakened and rates fell. That's about it, really! But the recap would look silly as 2 sentences, so here are a few more. The day began with bonds in just slightly weaker territory. Retail Sales came out at -0.1 vs a median forecast of +0.2. That's not the biggest miss in the world, but "negative" vs "positive" tends to have some psychological significance–especially for stocks. Accordingly, the bond market reaction at 8:30am was minimal, but the 9:30am NYSE open was more pronounced. Stocks and bond yields moved lower together starting at 9:30am. Just after 11am, the Atlanta Fed released a revision…(read more)

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