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MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear

MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear

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MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
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MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
News & media website News & media website | 1 year ago
Bonds Obliterated by CPI Reaction and Fed Fear If the bond market is forced to digest a surprisingly hot inflation report that goes a long way toward undoing much of the recent optimism surrounding a reversal in post-covid price pressures, we would always hope such things don't happen 3 days before a big Fed announcement with an updated dot plot.  But alas!  The dots cometh next Wednesday afternoon, and it's clear that market participants are hedging their bets for some significant migration t...
Bonds Obliterated by CPI Reaction and Fed Fear If the bond market is forced to digest a surprisingly hot inflation report that goes a long way toward undoing much of the recent optimism surrounding a reversal in post-covid price pressures, we would always hope such things don't happen 3 days before a big Fed announcement with an updated dot plot.  But alas!  The dots cometh next Wednesday afternoon, and it's clear that market participants are hedging their bets for some significant migration t...
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
News & media website News & media website | 2 years ago
Fed Speakers and Corporate Bonds Keep Negative Momentum Intact Bonds came into the domestic session moderately weaker, following European markets (which, themselves, were incidentally following US markets from Thursday afternoon and yesterday).  A majority of the selling in the morning hours followed the 8:20am CME open, suggesting traders showed up to sell regardless of data or events.  Afternoon weakness was more readily attributable to corporate bon...
Fed Speakers and Corporate Bonds Keep Negative Momentum Intact Bonds came into the domestic session moderately weaker, following European markets (which, themselves, were incidentally following US markets from Thursday afternoon and yesterday).  A majority of the selling in the morning hours followed the 8:20am CME open, suggesting traders showed up to sell regardless of data or events.  Afternoon weakness was more readily attributable to corporate bon...
MBS Live Recap: Bonds Consolidating at Higher Yields Ahead of CPI
MBS Live Recap: Bonds Consolidating at Higher Yields Ahead of CPI
MBS Live Recap: Bonds Consolidating at Higher Yields Ahead of CPI
MBS Live Recap: Bonds Consolidating at Higher Yields Ahead of CPI
News & media website News & media website | 1 year ago
Bonds Consolidating at Higher Yields Ahead of CPI The end of the week is marked by a battle with 3-letter abbreviations.  Tomorrow it will be CPI (the Consumer Price Index).  That will be the biggest potential market mover of the week, but its impact has yet to be revealed.  Today, it was the European Central Bank (ECB) with the latest policy announcement and press conference.  The ECB didn't do anything unexpected in terms of policy, but it significantly raised its inflation forecast, thus ...
Bonds Consolidating at Higher Yields Ahead of CPI The end of the week is marked by a battle with 3-letter abbreviations.  Tomorrow it will be CPI (the Consumer Price Index).  That will be the biggest potential market mover of the week, but its impact has yet to be revealed.  Today, it was the European Central Bank (ECB) with the latest policy announcement and press conference.  The ECB didn't do anything unexpected in terms of policy, but it significantly raised its inflation forecast, thus ...
MBS Live Morning: Good Start For Bonds After Cooler CPI
MBS Live Morning: Good Start For Bonds After Cooler CPI
MBS Live Morning: Good Start For Bonds After Cooler CPI
MBS Live Morning: Good Start For Bonds After Cooler CPI
News & media website News & media website | 2 years ago
CPI (the Consumer Price Index) is arguably the most important data point for interest rates in a world where inflation is at the highest levels since the 80s and the Fed is not currently worried about the labor market (otherwise, NFP would still command more respect).  Markets were concerned that this morning's release could be even hotter than forecasts suggested (granted, most of the year-over-year increase at the core level was expected due to "base effects").  As it happened, monthly CPI...
CPI (the Consumer Price Index) is arguably the most important data point for interest rates in a world where inflation is at the highest levels since the 80s and the Fed is not currently worried about the labor market (otherwise, NFP would still command more respect).  Markets were concerned that this morning's release could be even hotter than forecasts suggested (granted, most of the year-over-year increase at the core level was expected due to "base effects").  As it happened, monthly CPI...
MBS Live Recap: Fed Finally Sticks to Script. Bonds Like It
MBS Live Recap: Fed Finally Sticks to Script. Bonds Like It
MBS Live Recap: Fed Finally Sticks to Script. Bonds Like It
MBS Live Recap: Fed Finally Sticks to Script. Bonds Like It
News & media website News & media website | 1 year ago
Fed Finally Sticks to Script. Bonds Like It Fed days have seen a series of increasingly hawkish adjustments since last September.  This one is stands out as the first since then where the Fed has bowled right down the middle.  Powell only helped the cause during the press conference.  without another hawkish adjustment or warning from Powell in the press conference. The biggest turning point followed Powell's assertion that 75bp hikes are off the ta...
Fed Finally Sticks to Script. Bonds Like It Fed days have seen a series of increasingly hawkish adjustments since last September.  This one is stands out as the first since then where the Fed has bowled right down the middle.  Powell only helped the cause during the press conference.  without another hawkish adjustment or warning from Powell in the press conference. The biggest turning point followed Powell's assertion that 75bp hikes are off the ta...
MBS Live Recap: Abnormally Uneventful Friday For Bonds
MBS Live Recap: Abnormally Uneventful Friday For Bonds
MBS Live Recap: Abnormally Uneventful Friday For Bonds
MBS Live Recap: Abnormally Uneventful Friday For Bonds
News & media website News & media website | 2 years ago
Abnormally Uneventful Friday For Bonds Whether we're talking about actual Fridays or Thursdays that fall before 3-day weekends, the last trading day of each of the past 4 weeks has not been great for the bond market.  One of them marked an abrupt reversal of our best shot at consolidation, and the other three took rates rapidly up to new long-term highs.  Today was great by comparison with Treasury yields falling modestly and MBS holding mostly steady ...
Abnormally Uneventful Friday For Bonds Whether we're talking about actual Fridays or Thursdays that fall before 3-day weekends, the last trading day of each of the past 4 weeks has not been great for the bond market.  One of them marked an abrupt reversal of our best shot at consolidation, and the other three took rates rapidly up to new long-term highs.  Today was great by comparison with Treasury yields falling modestly and MBS holding mostly steady ...
MBS Live Recap: Bonds Holding Gains Despite Bounce in Stocks; Fed Minutes Uneventful
MBS Live Recap: Bonds Holding Gains Despite Bounce in Stocks; Fed Minutes Uneventful
MBS Live Recap: Bonds Holding Gains Despite Bounce in Stocks; Fed Minutes Uneventful
MBS Live Recap: Bonds Holding Gains Despite Bounce in Stocks; Fed Minutes Uneventful
News & media website News & media website | 1 year ago
Bonds Holding Gains Despite Bounce in Stocks; Fed Minutes Uneventful Today's Fed Minutes proved to be every bit as uneventful as they might have been.  There was no meaningful reaction in the bond market, though one might content that stocks improved as a result.  Therein lies the day's most interesting development: the biggest divergence between stocks and bond yields that we've seen in the past few weeks, or rather, the confirmation that...
Bonds Holding Gains Despite Bounce in Stocks; Fed Minutes Uneventful Today's Fed Minutes proved to be every bit as uneventful as they might have been.  There was no meaningful reaction in the bond market, though one might content that stocks improved as a result.  Therein lies the day's most interesting development: the biggest divergence between stocks and bond yields that we've seen in the past few weeks, or rather, the confirmation that...
MBS Live Morning: Stocks, Bonds, and Rate Hike Expectations Reacting to CPI; MBS Roll
MBS Live Morning: Stocks, Bonds, and Rate Hike Expectations Reacting to CPI; MBS Roll
MBS Live Morning: Stocks, Bonds, and Rate Hike Expectations Reacting to CPI; MBS Roll
MBS Live Morning: Stocks, Bonds, and Rate Hike Expectations Reacting to CPI; MBS Roll
News & media website News & media website | 1 year ago
Both at the headline and core levels, April's Consumer Price Index (CPI) came in hotter this morning.  This was a high-consequence report for bonds, and they're acting the part with a big reversal of overnight gains and early weakness in MBS.  Stocks were also swept up in the implications for Fed policy (i.e. higher inflation = tighter Fed policy = bad for both stocks and bonds). As for the data itself, the report was mixed.  Annual numbers actually declined from previous readings (headline...
Both at the headline and core levels, April's Consumer Price Index (CPI) came in hotter this morning.  This was a high-consequence report for bonds, and they're acting the part with a big reversal of overnight gains and early weakness in MBS.  Stocks were also swept up in the implications for Fed policy (i.e. higher inflation = tighter Fed policy = bad for both stocks and bonds). As for the data itself, the report was mixed.  Annual numbers actually declined from previous readings (headline...
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
News & media website News & media website | 1 year ago
Fed Day Preview: What Are They Doing and How Much Will Bonds Care? Given all the bond market volatility seen recently, the outlook for tomorrow's Fed announcement is surprisingly well understood by market participants. Both Fed speakers and Fed Fund Futures agree on a 50bp hike as a virtual certainty.  We also know the Fed is highly likely to announce a start date for balance sheet normalization.  They were even kind enough to lay out a normalization g...
Fed Day Preview: What Are They Doing and How Much Will Bonds Care? Given all the bond market volatility seen recently, the outlook for tomorrow's Fed announcement is surprisingly well understood by market participants. Both Fed speakers and Fed Fund Futures agree on a 50bp hike as a virtual certainty.  We also know the Fed is highly likely to announce a start date for balance sheet normalization.  They were even kind enough to lay out a normalization g...
MBS Live Recap: Daly Upstages Powell in Today's Fed Drama
MBS Live Recap: Daly Upstages Powell in Today's Fed Drama
MBS Live Recap: Daly Upstages Powell in Today's Fed Drama
MBS Live Recap: Daly Upstages Powell in Today's Fed Drama
News & media website News & media website | 2 years ago
Daly Upstages Powell in Today's Fed Drama With both Fed Chair Powell and ECB President Lagarde scheduled to speak at the same venue this afternoon, markets were gearing up for the heads of the world's two biggest central banks to set the tone for the global bond market.  But before the first Powell/Lagarde newswires even hit, San Francisco Fed President Mary Daly gave an interview that got bad balls rolling for bonds.  In fact, even earlier in the morn...
Daly Upstages Powell in Today's Fed Drama With both Fed Chair Powell and ECB President Lagarde scheduled to speak at the same venue this afternoon, markets were gearing up for the heads of the world's two biggest central banks to set the tone for the global bond market.  But before the first Powell/Lagarde newswires even hit, San Francisco Fed President Mary Daly gave an interview that got bad balls rolling for bonds.  In fact, even earlier in the morn...