MBS Day Ahead: Active Day For Data

In the day just passed, bond markets primarily reacted to overseas economic data with many of the reports in Europe coming in flat to weaker. Combined with the weakest Chinese manufacturing data in years, it was enough to push bonds through recent resistance levels and to new low yields since 2016. The domestic hours were especially influenced by a massive drop in equities. In the day ahead, we'll get the biggest slate of domestic economic data of the week, led by Retail Dales and Philly Fed at 8:30am. The consumer spending sector is arguably the last bastion of economic health in the US along with stable employment numbers. Any cracks in Retail Sales would thus be a big deal whereas an unexpected surge might not do too much to hurt bonds given the laundry list of other concerns. That's...(read more)

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