UMBS opened up 27 bps.  S&P futures are up 35.75 points

After yesterday's somewhat dire implications from quarterly data, today's monthly numbers are surprisingly in line with forecasts.  Quarterly numbers were 0.3% higher than forecast, suggesting that today should have been 0.4 or 0.5 at least for the monthly number.

As such, the 2.8 vs 2.6 forecast for the annual number is being taken in stride and markets are focusing on the 0.3 vs 0.3 f'cast being better than expected--not that it's actually better than the forecast, but remember that forecasts come from economist surveys and it was too late to re-survey on the fly yesterday.  Traders certainly no longer expected 0.3.

Monthly Core PCE = 0.3 vs 0.3 f'cast,      [0.3 prev]

Annual Core PCE  = 2.8 vs 2.6 f'cast,        [2.8 prev]

Personal incomes rose 0.5% MOM in March, while personal consumption rose 0.8%. Spending rose 0.8%, driven by increases in healthcare and housing. Again, I point to the vivisection  here - high consumer spending is usually associated with economic booms, however when the increased spending is driven by non-discretionary items, it doesn't feel like a boom. Nobody gets a recreational root canal.

Yesterday's GDP data included the Core PCE Price Index, which came in at 3.7% vs 3.4% forecast.  It suggested that today's Core PCE Price Index reported in the Incomes/Outlays report would also be higher than forecast since it comes from the exact same underlying data.  Surprisingly enough, the monthly change in March was right in line with the 0.3% expectation (.317% before rounding).  This came down to a few issues with the most important change being upward revisions to January and February.  Bonds are happy because reality is not quite as scary as yesterday made it seem.  Trading levels reflect this as MBS and Treasuries are still a hair weaker than they were before yesterday's data, but much stronger versus yesterday's close.

UMBS closed up 30 bps at 99.37

WTMS Blog Today - - Elevate Your Sales Game with Steve Pressfield's Insights ???? Dive into the transformative wisdom of "Turning Pro" and "The War of Art" to unlock the secrets of sales success. Discover how to cultivate a professional mindset, embrace challenges as opportunities for growth, and harness the power of persistence to achieve your goals. Salespeople, arm yourself with the knowledge and inspiration you need to thrive in today's competitive market.

#salessuccess , #ProfessionalDevelopment, #StevePressfield

UMBS opened down 11 quick basis points.

Bonds were weaker in the overnight session on a combination of anxiety over potential Treasury selling in Japan and stronger data in Europe.  Comments from an ECB official regarding a "one and done" rate cut in June also added to the pressure.

The 8:30am Durable Goods data hasn't had any meaningful impact on the overnight weakness.  Yields were roughly 4bps higher to start and they're now 4.7bps higher at 4.647.  Rather than chalk the slight increase up to the relatively unimportant Durables data, it makes more sense to view it as a simple continuation of the overnight trend.

Durable Goods = 2.6 vs 2.5 f'cast

last month revised from 1.3 to 0.7

Durables, excluding defense and aircraft = 0.2 vs 0.2 f'cast

last month revised from 0.7 to 0.4

New Home Sales rose 8.8% MOM in March to a seasonally adjusted annual rate of 693,000. This is up 8.3% on a year-over-year basis. The median new home price fell 2% on a YOY basis to $430,700. There is an 8.3 month supply of homes for sale.

Jamie Dimon is worried that stagflation might be returning to the US.

Bonds were weaker in the overnight session on a combination of anxiety over potential sales of US Treasuries in Japan and European economic data.  The domestic session brought actual selling of US Treasuries in the form of the 5yr Treasury auction, but the market already knew about that one.  The auction was reasonably well received and had no impact on trading levels.  Earlier in the morning, Durable Goods came out right in line with expectations and also had essentially no impact.  Overnight weakness was maintained throughout the day with most of the momentum being sideways near recent highs yields.

MBS closed the day down 15 bps at 99,46.