UMBS opened the day UP 10 bps.  WooHoo.  It’s not a lot – but at least it’s green.  S&P Futures down 2.25

Jobless Claims = 233k vs 236k f’cast,                [239k prev]

Continued Claims = 1839k vs 1820k f’cast,      [1821k prev]

Durable Goods = 0.1 vs -0.1 f’cast

last month revised down to 0.2 from 0.7

Core Durables = -0.6 vs 0.1 f’cast,     [0.3 prev]

Final Core PCE Prices Q1 (ancient history) = 3.7 vs 3.6 f’cast

Final GDP = 1.4 vs 1.4 f’cast/prev

Corp Profits = -2.7 vs -1.7 f’cast

It’s been an odd morning for the bond market, but not in an objectionable way.  In not so many words, bonds are rallying somewhat nicely despite an absence of obviously compelling data.  We can make a case for it, but it takes some doing due to the sheer amount of 8:30am line items.  Those can be whittled down by removing the stale Q1 numbers (GDP, PCE, Corp profits, etc.).

Of the remaining reports, only Durable Goods emerges as a solid scapegoat.  Headline readings remain low and the “core” (excluding defense and aircraft) was much lower than expected.  Even so, the rally is a bit bigger than we’d expect, but we’re not complaining.

New Home Sales fell 11.3% month-over-month and 16.5% year-over-year to a seasonally adjusted annual rate of 619,000. The median sales price fell slightly to $417,400.  The pace of home sales over the past 5 years (excluding the pandemic bump) is roughly what they were 60 years ago, when the population was a little over half of what it is today.

Unlike yesterday, the overnight session sent bonds into domestic hours at perfectly unchanged levels.  Almost all of the movement happened after the 8:30am econ data.  Connecting the data to the movement takes a bit of creativity and quite a bit of sorting.  We can immediately throw out the Q1 GDP data as being too stale to be relevant at this point.  That leaves Durable Goods (negative revision and big miss for nondefense, ex-air) and Continuing Jobless Claims as leading contenders.  Both may have contributed, but it’s hard to say which contributed more.  Either way, bonds rallied into the 10am hour and went sideways from there.

UMBS closed the day up 12 bps at 100.54

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