Published Date 9/30/2022
Treasury yields increased yesterday. The 10 at 9 am ET 3.71% -8 bps. MBS prices declined 37 bps yesterday, up 7 bps at 9 am.
Inflation ticked up a little in August based on the PCE data released at 8:30 am. The price index expected +0.2% m/m increased 0.3%, up from -0.1% in July; yr./yr. +6.2% on estimates of 6.1%. The core PCE expected +0.5% m/m increased 0.6%, yr./yr. expectations 4.8%, as released +4.9%. The Core in July yr./yr. 4.7%. Personal income in August up 0.3% as expected; personal spending was thought to be +0.2% increased 0.4%. Spending on services like rent, utilities, transportation and health care picked up strongly in August, rising 0.8% from July, while goods spending declined for the second month in a row as gasoline prices fell. Reactions were rather subdued, interest rates, already lower didn’t change either way on the data. U.S. stock futures were mixed, oil prices gained, and bond markets stabilized after indexes finished lower yesterday amid worries about a global slowdown.
At 9:30 am the DJIA opened -85, NASDAQ -41, S&P -8. 10 yr. note 3.72% -7 bps. FNMA 5.5 30 yr. coupon +23 bps and +13 bps from 9:30 am yesterday.
At 9:45 am Sept Chicago purchasing mgrs. index, the estimates were 52.0 from 52.2 in August, the index declined to 45.7 the lowest since June 2020 and under 50 indicating contraction, the 10 yr. note yield dipped 2 bps, from 3.72% to 3.70% -8 bps on the day on the news.
At 10 am the final U. of Michigan consumer sentiment index for Sept thought to be at 59.9, the index fell to 58.6.
The technical correction continues, so too the volatility. The trend is still bearish for interest rates, technical support for the 10 yr. note at 3.64%.
Source: TBWS
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