Bonds Rally on Month-End Trading and Friendly Inflation Data
Fri, Mar 31 2023, 3:34 PM
Bonds Rally on Month-End Trading and Friendly Inflation Data
Bonds began the day in unchanged territory and made cautious gains after reasonably friendly inflation data. PCE was a bigger factor than the Consumer Sentiment inflation expectations, but both contributed. Given our position on the calendar, we should also consider the impact of month/quarter-end positioning. It would help account for some of this week’s resilience in US bond markets relative to the suggestion of equities markets or EU bonds.
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- Core PCE Inflation y/y
- 4.6 vs 4.7 f’cast, 4.7 prev
- Chicago PMI
- 43.8 vs 43.4 f’cast, 43.6 prev
- Consumer Sentiment
- 62.0 vs 63.2 f’cast, 63.4 prev
- 1yr inflation expectations
- 3.6 vs 3.8 prev
- 5yr inflation expectations
- 2.9 vs 2.8 prev
- Core PCE Inflation y/y
09:31 AM
Roughly unchanged overnight. Moderately stronger after inflation data. 10yr down 3bps at 3.517. MBS up 2 ticks (.06).
01:10 PM
Slow, steady gains all day. Some month-end bond buying is likely contributing. MBS up more than an eighth. 10yr down 4bps at 3.507
03:20 PM
Additional gains before and after the 3pm CME close. 10yr down 6bps at 3.486. MBS up a quarter point.
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Source: mortgagenewsdaily.com