MBS Day Ahead: Not Expecting Fireworks Ahead of 3-Day Weekend

Posted To: MBS CommentaryBetween the mid-term elections earlier this week and the simple tradeflow move following the Fed yesterday, bond markets have had their chance to make any necessary adjustments before the next big data point coming up next week. CPI (the consumer price index) isn’t the be all, end all market mover, but it’s important right now because it has a chance to confirm or reject the notion that the strongest wage growth in a decade will actually translate to an uptick in prices. If we’re to believe this morning’s Producer Price data, consumers should certainly be prepared to pay more. If CPI continues in a 2.2-2.3% year over year range (at the core level), that would actually be a bond-friendly development. It would mean producers aren’t able to pass on their higher input costs…(read more)Forward this article via email:¬†¬†Send a copy of this story to someone you know that may want to read it.

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Michael Ayoub, Author NMLS ID 6631