Daily Newspaper: Friday September 8, 2023
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Uneventful Friday. Thoughts on the CPI Apart from the fact that 10-year Treasury yields are about 25 bps higher than before last Friday’s jobs report, it was an uneventful week for the bond market with only one or two exceptions. The first exception was the exceptionally large volume of corporate bonds that came to market in the first half of the week. The result was continued upward pressure on rates for no apparent reason. Second was Wednesday’s ISM service data which added upward pressure. There was a technical correction/recovery on Thursday and Friday was completely unnecessary. Thoughts are already turning to next week’s CPI which comes a week before the all-important Fed meeting. Volatility would likely be high anyway, but doubly so in this case because the Fed is in a blackout period before its meeting, thus making the market’s imagination run wilder than usual. Ekon Data/Event Bulk Inventories -0.2 vs -0.1 F’cast, -0.7 Previous Market Movement Recap 09:33am Strong early overnight session, weak in Europe, but bounce back quickly. 10Y down 1.8bps at 4.232. MBS up 3 ticks (.09). 12:03 PM Continuous weakness since 10 am. MBS is now unchanged and the 10 year is up 0.2bps at 4.25%. 02:28 PM Slightly weak in the PM, but bouncing back now. MBS is up 1 tick (0.03) and is back at 4.25% after rising to 4.264% 10 years ago Very flat in the afternoon hours at 04:00 PM. MBS is down 1 tick (0.03) and 10 year yields are up 0.6bps at 4.256.