In today’s update on September 29th, Mortgage-Backed Securities (MBS) gained 16 basis points, with S&P futures up 30.25 points. European bonds strengthened due to low EU inflation and steep declines in German import prices.

PCE data initially rallied but later fluctuated, possibly due to a core monthly figure close to expectations.

  • Core PCE m/m: 0.1 vs. 0.2 forecast, 0.2 previous
  • Core PCE y/y: 3.9 vs. 3.9 forecast, 4.3 previous
  • Personal Spending: +0.4% MoM vs. 0.5%

The likelihood of a government shutdown looms, with minimal actual impact expected.

Consumer sentiment decreased in September, with moderating inflation expectations, offering a positive sign.

Bonds improved overnight, navigating uncertainty around the shutdown and month-end tradeflows, as the most crucial data week approaches without key reports.

Bonds ended the day down 11 basis points, marking a 38 basis point drop from the day’s highs.

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