Skip to main content

Another Big November Rally After CPI

Another Big November Rally After CPI There’s something about CPI releases in November.  Last year’s example prompted one of the biggest single-day, data-driven bond market rallies on record.  This year’s isn’t far off–a fact made all the more stunning by the mere 0.1% beat (Core monthly CPI 0.2 vs 0.3 f’cast).  There are a few ways to try to explain the size of the reaction. On a nitty gritty note, the problematic housing component fell from 0.6 to 0.3.  On a more general note, it’s possible the bond market was more interested in “no whammies” than a sweeping reversal of inflationary pressures. Econ Data / Events m/m Core CPI 0.2 vs 0.3 f’cast, 0.3 prev m/m Headline CPI 0.0 vs 0.1 f’cast, 0.4 prev Market Movement Recap 08:38 AM Slightly stronger overnight and much stronger after CPI data.  10yr down 12.6bps at 4.512.  MBS up 14 ticks (.44). 10:02 AM 10s bottomed at 4.434 and are still down 18bps on the day at 4.457. MBS are up 26 ticks (.81). 12:40 PM Off the best levels, but not by much.  MBS still up 27 ticks (.84).  10yr down 17.3bps at 4.465. 04:02 PM Briefly in line with best levels and now slightly lower in MBS, currently up just shy of a full point.  10yr down 19bps at 4.447.

“The first dental office
I actually like going to.”

Get in touch to make an appointment today.