Market Snapshot July 14, 2017
Good Friday A.M.,
Some weaker economic data this am gave bonds a boost out of the gate.
June Retail Sales in at -0.1% on expectations of 0.3%
June Consumer Price Index (in at 1.6% on expectations of 1.7%
It made a difference. The 10-yr opened at 2.34 and dropped to 2.28%. It put a big smile on my face. That is before some profit taking jumped in and started selling into the rally. Currently we are back to 2.34% on the 10-yr and Mortgage bonds are +10bps. As long as we go out here or better for the weekend, it is a win.
Here are some sage words from Dan Rawitch on why rates will improve. I think he is right about 90% of the time (although he did miss the last 100bps drop from Mr. Draghi…) I continue to see the need for lower rates, it is showing up in many places and I continue to believe we could see a significant drop in GDP, which will show up in either Q2 or Q3 and lead us to a sub 2% 10-year treasury bond.
Enjoy the weekend and first make today great!