Decent Recovery After AM Backtracking

CPI data was a mixed bag for bonds.  Top-line numbers fueled a quick rally and digestion of the details brought us back to negative territory (albeit with help from stronger S&P PMI data). Bonds found their footing shortly after 10am at just slightly stronger levels and then stayed mostly sideways through the close.  Pretty ho-hum CPI day given all the anticipation…

Econ Data / Events

m/m CORE CPI (Sep)

0.227% vs 0.3% f’cast, 0.3% prev

m/m Headline CPI (Sep)

0.3% vs 0.4% f’cast, 0.4% prev

y/y CORE CPI (Sep)

3.0% vs 3.1% f’cast, 3.1% prev

y/y Headline CPI (Sep)

3.0% vs 3.1% f’cast, 2.9% prev

m/m SUPERCORE

.351 vs .330 prev

Market Movement Recap

09:51 AM Initially stronger after CPI data, but now turning red after PMI data.  MBS unchanged and 10yr up 1.2bps at 4.013

01:51 PM Crawling back into positive territory.  MBS up an eighth and 10yr down 1.2bps at 3.99

04:40 PM Heading out at just slightly stronger levels with MBS up an eight and 10yr yields down half a bp at 3.997