Strongest Close of the Week After Well-Contained Month-End Volatility

There was always a reasonably high bar for today’s econ data to have a big impact. When it came out right in line with expectations this morning, that ship sailed. That left the month-end trading environment as the most likely source of inspiration.  While we can certainly see some evidence of month-end volatility, it played out in a narrow range.  More importantly, it resolved with bonds at the strongest levels of the week, even if by only a small margin.  

Econ Data / Events

Core PCE monthly

0.1 vs 0.1 f’cast, 0.0 prev

Core PCE Annual

2.5 vs 2.5 f’cast, 2.7 prev

Wholesale Inventories

0.0 vs 0.4 f’cast, 0.7 prev

Market Movement Recap

08:40 AM flat overnight and minimal reaction to data. MBS unchanged and 10yr up 1.5bps at 4.435

11:31 AM Steady near unchanged levels in MBS.  10yr down 1.2bps at 4.407

03:40 PM Best levels of the day, but minimal movement overall.  MBS up an eighth and 10yr down 2.1bps at 4.399