MBS RECAP: CPI Threads Market-Movement Needle

By Matthew Graham

Posted To: MBS Commentary

Bond markets ultimately rallied modestly following today’s much-anticipated CPI data. This is a departure from recent norms as the last 3 reports have generated some of the biggest reactions in each of the past 3 months. Still, the result is understandable given the lack of change in annual core inflation. For the 3rd straight month, it came in at 1.7%. Bond bulls like it because it’s still low. Bond bears like it because it’s not moving lower. Trading ensued accordingly, with multiple lead changes before things finally settled down. At their best levels , 10yr yields were as low as 2.182. At their highs, they were 2.222–a fairly narrow range given the nature of today’s data. Fannie 3.5 MBS ended the day up 3/32nds at 103-10. Note: the 2-day chart on MBS Live shows today’s…(read more)

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