MBS RECAP: Why Didn’t Bonds Seem to Care About Retail Sales?

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Posted To: MBS Commentary

There was a bit of a giveaway in this morning's commentary, titled " Brexit Headlines vs Retail Sales ." Indeed, it's "Brexit headlines" that answer the question in the most recent headline. In other words, bond markets at home and abroad (but especially abroad) were focused on moving higher in yield this morning in response to Brexit headlines. One notable example hit just before the Retail Sales data came out. A reading of -0.3% vs a forecast of +0.3% is a fairly meaningful miss for this data series and certainly worth more improvement in bonds than we saw. But because of the upward pressure created by the Brexit reaction, all we got was ground-holding while European yields continued higher. In fact, once traders made their Retail Sales trades, US yields went a…(read more)

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