Posted To: MBS Commentary
Today’s only relevant economic data is the Producer Price Index (PPI)–an inflation metric at the wholesale level. Although inflation is back in the spotlight after years of obscurity (it was so far from a consideration that smart investors didn’t care about inflation reports), some inflation data matters more than others. If there’s a lead dog, it’s the Consumer Price Index (CPI), which has consistently been a bigger market mover than PPI. In the following chart, note how much bigger the movement has been on CPI days–especially those in May and June which were among the biggest trading days of the summer. In fact, if one piece of economic data is responsible for bond market resilience during those months, it’s CPI. If anything will garner a meaningful reaction today, it…(read more)
Via:: MBS Day Ahead: This Isn’t The Inflation Data You’re Looking For
