MBS RECAP: Next Week Should be More Interesting

Posted To: MBS Commentary

Today was a non-starter, despite the presence of economic data that certainly had the street cred to move markets (if markets were inclined to move). GDP cam in stronger than expected at +1.2 vs +0.9 forecast, as did Durable Goods (-0.7 vs -1.2 forecast). The biggest counterpoint in the data was the weakness in the "Cap-Ex" component of Durable Goods (officially... "Non-defense capital goods orders, excluding aircraft") which came in at 0.0 vs 0.5 forecast. Think of Cap-Ex like the " core " component in the same way "Core CPI" is thought to be more relevant than plain old CPI. Whether the Cap-Ex miss was enough to justify bond market ground-holding is at moot point. Traders didn't trade the data either way. The day ended up being an opportunity for...(read more)

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