Paradoxical Rally Gets Logical After Retail Sales
Fri, Feb 14 2025, 5:12 PM
If yesterday’s PPI-driven rally was a paradox, today’s continuation was quite the opposite. While it’s not the most reliable market mover among economic reports, Retail Sales can occasionally go big. Today was such an example. Including or excluding the auto sector, sales dropped at the fastest pace in just over year and missed forecasts by the widest margin in several years. That provided a clear mandate for bond traders to press the happy button, ultimately ushering yields to the lowest levels of the week.
- Retail Sales
- -0.4 vs 0.3 f’cast, 0.4 prev
- Retail Sales excluding autos
- -0.4 vs 0.3 f’cast, 0.7 prev
- Import Prices
- 0.3 vs 0.4 f’cast, 0.2 prev
- Industrial Production
- 0.5 vs 0.3 f’cast, 1.0 prev
- Retail Sales
09:15 AM
Roughly unchanged overnight and sharply stronger after retail sales data. MBS up 10 ticks (.31) and 10yr down 6.7bps at 4.465
01:40 PM
Still mostly holding morning rally. MBS still up .31. 10yr down 5.9bps at 4.472
05:10 PM
Sideways into the close with MBS only 1 tick (.03) lower than last time. 10yr yields ended down 5.6bps at 4.476
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