Overnight Weakness, Limited CPI Impact, MBS Outperformance
There was a very high bar for today's CPI to cause any serious market reaction due to all the new inflationary impulses that may be created by record volatility in energy markets that hasn't yet made it into the official data. In other words, CPI is a time capsule for a bygone era and the market is already trading the implications on future inflation reports to the best of its ability using oil prices as a proxy. Before the data, 10yr yields were a few bps higher overnight and haven't moved since the data. MBS are unchanged to a hair stronger after accounting for "the roll."
Rather than dissect the data that failed to move the market (it was fairly boring anyway as everything came in right in line with forecasts), we can take another look at the interesting impact of chart scaling. Specifically, we talked about how Treasuries broke up and away from the path suggested by oil prices yesterday. A full 3-day chart reiterates that assessment:
But if we zoom in to a 2-day chart (which chops off the super high oil prices on Monday), it's much easier to see that oil and yields are still strongly correlated.
Categories
Recent Posts

Just Another Reasonably Bad Day For Bonds

Mortgage Rates Inch Up to 11-Month High

Servicing, Non-Agency, AI Processing Tools; Condo Turmoil Ahead?

Just a Bit Weaker as Oil Keeps Rising

Headwinds, Cont'd

Rates Match Longer-Term High For The 3rd Time in 2026

HELOC AI, Doc Analysis, Home Equity POS Products; L1 rebrand; Delinquencies Impact Rates; Live RESPA Panel

Bonds Grudgingly Giving Back Last Week's Inflation Rally

New Week. Same Old Story

Mortgage Rates Bouncing Higher to Start The Week
GET MORE INFORMATION


