Dot Plot in Focus With Fed’s “No Cut” Announcement

Bonds lost some ground after this morning’s economic data, arguably in response to the Retail Sales control group beating its forecast.  Higher-than-expected import prices could also have played a supporting role, but the selling was too modest to worry about perfectly allocating the blame.  It was also erased by an afternoon rally that was best explained by general risk-off vibes surrounding geopolitical headlines.  Here too, we’re not seeing anything too compelling in terms of trading justification.  The best bet on that front would be Wednesday’s dot plot from the Fed (the chart showing each Fed member’s rate outlook over the next few years).  That will be released at 2pm with the “no cut” announcement.

Econ Data / Events

Retail Sales

-0.3 vs 0.1 f’cast, 0.0 prev

Core Retail Sales

0.4 vs 0.3 f’cast, -0.1 prev

Export Prices

-0.9 vs -0.7 f’cast, 0.1 prev

Import Prices

0.0 vs -0.2 f’cast, 0.1 prev

Market Movement Recap

09:09 AM Stronger overnight, flat after data, and losing some ground now.  MBS still an eighth higher on the day and 10yr down 3.5bps at 4.417

01:53 PM Best levels of the day now on Middle East newswires.  MBS up 5 ticks (.16) and 10yr down 6.5bps at 4.386