Wednesday’s CPI data resembled a passionate political speaker campaigning for the country to go to war on low interest rates. Yesterday’s 30-year bond auction started with a “not-so-fast” counterpoint, and today’s retail data gives us hope that cooler heads will prevail. Bottom line: As of this morning, midweek drama seems to have given way to the same old trading range that has been intact since April 7th.
Econ data / events
Fed MBS purchase 10 a.m., 11:30 a.m., 1 p.m.
Retail sales 0.0 vs 1.0 f’cast, 10.7 prev
Consumer sentiment 82.8 vs 90.4 f’cast, 88.3 prev
(1y) 4.6 vs 3.4 prev
(5y) 3.1 vs 2.7 prev
Market Movement Review
Apartment in Asia. Modestly stronger in Europe and now flat (at a slightly stronger level) by retail sales. 10 year return by 2.2 basis points and MBS by almost an eighth.
Extremely slow and mostly sideways. Bonds are not at their best but are still in stronger territory on the day. 10 year yields are 1.7 basis points lower at 1.642 and MBS are 1-2 ticks (0.03-0.06) higher.
Modest gains over the past hour or two, with yields returning to their prime (10’s currently falling 2.7 basis points to 1.632). MBS aren’t quite as close to their morning highs but have improved a bit since the last update with 2.5 coupons, an eighth a day at 103-14 (103.54).
MBS Pricing Snapshot
The prices below are late. Please note the timestamp below. Real-time pricing is available through MBS Live.
103-15: + 0-05
|Prices from 05/14/21 4:32 p.m. CEST|
Today’s reprice notifications and updates
8:39 a.m. :: Little changed after weaker retail sales
MBS Live Chat Highlights
John G. Tassios NMLS: 114027 :: “Imbalances in demand for supply due to supply chain disruptions, workers staying home instead of looking for work, and various US states and countries still partially closed. Fed policy cannot adjust this. Market forces will automatically correct supply demand imbalances once supply chains fully open. I’ve already begun to see consumers reject abnormally higher prices for goods and services and wait for future lower prices before buying. I had two smaller builders who told me they would stop building until timber prices drop and workers are looking for work again, and I’m sure this will repeat itself in other areas where the prices of raw materials, goods and services are slowly falling.