Wednesday’s CPI data was akin to some passionate political orator making a case for the country to go to war against low rates.  Yesterday’s 30yr bond auction stepped in with a “not so fast” counterpoint, and now today’s Retail Sales data gives us hope that cooler heads will prevail.  Bottom line, as of this morning mid-week drama looks to have given way to the same old trading range that’s been intact since April 7th.

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • Retail Sales 0.0 vs 1.0 f’cast, 10.7 prev

  • Consumer Sentiment 82.8 vs 90.4 f’cast, 88.3 prev
    inflation expectations
    (1y)  4.6 vs 3.4 prev
    (5y)  3.1 vs 2.7 prev

Market Movement Recap

08:52 AM

Flat in Asia.  Modestly stronger in Europe, and now flat (at slightly stronger levels) after Retail Sales.  10yr yields down 2.2bps and MBS ALMOST up an eighth.  

02:02 PM

Extremely slow and mostly sideways.  Bonds are off their best levels, but still in stronger territory on the day.  10yr yields are 1.7bps lower at 1.642 and MBS are 1-2 ticks (0.03-0.06) higher.  

03:58 PM

Modest gains in the past hour or two with yields inching back toward their best levels (10’s currently down 2.7bps at 1.632).  MBS aren’t quite as close to their morning highs, but have also improved a bit since the last update with 2.5 coupons up an eighth on the day at 103-14 (103.54).


MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

MBS

UMBS 2.5

103-15 : +0-05

Treasuries

10 YR

1.6320 : -0.0360

Pricing as of 5/14/21 4:32PMEST

Today’s Reprice Alerts and Updates

8:39AM  :  Little-Changed After Weaker Retail Sales


MBS Live Chat Highlights

John G. Tassios NMLS: 114027  :  “Supply Demand imbalances occurring due to supply chain interruptions, workers staying home instead of seeking work, and various U.S. states & countries still partially shut. FED policy cannot adjust this. Market forces will auto correct supply demand imbalances once supply chains open up fully. Already beginning to see consumers balking at unusually higher prices on goods and services, and waiting for future lower prices before purchasing. I had 2 smaller home builders tell me they will halt home construction until lumber prices come down and workers return to seeking work again. I’m sure this will be repeated in other areas, which will begin to slowly reduce prices on raw materials, goods , services will adjust accordingly. just my @2cents”


Economic Calendar

Time Event Period Actual Forecast Prior
Friday, May 14
8:30 Retail Sales (%)* Apr 0.0 1.0 9.8
8:30 Export prices mm (%) Apr 0.8 0.6 2.1
8:30 Import prices mm (%) Apr 0.7 0.6 1.2
9:15 Industrial Production (%) Apr 0.7 1.0 1.4
10:00 1yr Inflation Outlook (%) May 4.6 3.4
10:00 5yr Inflation Outlook (%) May 3.1 2.7
10:00 Consumer Sentiment May 82.8 90.4 88.3
10:00 Business Inventories (% ) Mar 0.3 0.3 0.5

By Matthew Graham , dated 2021-05-14 16:32:04

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Courtesy of Mortgage News Daily

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