Big Rally Just Getting Started or at Risk of a Correction?
Thu, Dec 14 2023, 3:55 PM
Overseas markets added on to the rate rally inspired by Wednesday’s Fed dots and press conference. That’s a common enough occurrence that it shouldn’t surprised us, but it doesn’t carry any conclusive implications for domestic trading. For instance, we would be well within our right to worry that a strong Retail Sales report could derail the rally. Indeed, sales data was strong and there was a brief selling response in bonds, but the glacial momentum of the “pivot” trade was not to be deterred. Is this just a follow-through day that’s destined to give way to a consolidation bounce or is the pivot trade just getting started?
- Retail Sales
- 0.3 vs -0.1 f’cast, -0.2 prev
- Jobless Claims
- 202k vs 220k f’cast, 221k prev
- Import Prices
- -0.4 vs -0.8 f’cast, -0.6 prev
- Retail Sales
08:34 AM
Rally extends overnight. Modest pull-back after data. 10s down 4.9bps at 3.975. MBS up a quarter point.
09:48 AM
Bouncing back a bit from post-data weakness. MBS up 10 ticks (.31) and 10yr down 8bps at 3.943.
01:40 PM
Broadly flat, trading in the middle of today’s range. MBS up 9 ticks and 10yr down 8.8bps at 3.936.
03:44 PM
Off the PM lows now with MBS up a quarter point on the day. 10yr yield down 11.8bps at 3.906.
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