Action Packed Calendar But No Major Action in Bonds

This morning’s economic calendar was certainly the most action-packed of the present week. GDP had something for everyone. The evening news can no doubt harp on the “negative” headline while the financial market immediately understood the impact of a massive surge in imports. Numbers that exclude those accounting impacts make domestic consumption look normal and right in line with last quarter. Inflation was tame, but traders are waiting for future, tariff-affected reports. Treasury issuance was confirmed to hold flat, and the “massive” 6% increase in pending home sales is like a team who won 2 games this year vs 1 game last year saying their won 100% more.  By the end of the day, bonds were almost perfectly unchanged, even after month-end trading brought a big of volatility at 3-4pm ET.

Econ Data / Events

Employment Cost Index

0.9 v 0.9 f’cast, 0.9 prev

GDP

-0.3 vs +0.3 f’cast, 2.4 prev

Core PCE QoQ

3.5 vs 3.3 f’cast, 2.6 prev

GDP Final Sales

-2.5 vs +3.3 prev

Monthly core PCE

0.0 vs 0.1 f’cast, 0.4 prev

Market Movement Recap

09:47 AM Initially weaker following data, but bouncing back on safe-haven buying (stock selling). MBS up 1 tick (0.03) and 10yr down 1.9bps at 4.157

10:22 AM Choppy trading, but generally resolving toward strength.  MBS unchanged and 10yr down 1.4bps at 4.163

12:58 PM Still mostly sideways, with choppy trading dying down.  MBS unchanged and 10yr down 1.2bps at 4.165

03:43 PM A bit stronger after 3pm month-end bond buying.  MBS up 2 ticks (.06) and 10yr down 2.6 bps at 4.15