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No Whammies in PCE Data, but Bonds Lose a Bit More Ground
  • Spending +0.2 vs +0.3 forecast
  • Income +0.4 vs +0.3 forecast
  • Core PCE +0.3 vs +0.2 forecast
  • Core PCE y/y +1.7 vs +1.7 previously

With Core PCE holding at 1.7 year-over-year, there's no substantial bias in the Incomes and Outlays (official name of this report) data.   Better-than-expected income and month-over-month PCE  is a problem, however, and it looks to be offsetting the weaker-than-expected spending.

10yr yields are just slightly higher after the data (though, notably, their first reaction was to move slightly lower).  Fannie 3.5s remain flat at 102-00 (down just over a quarter point on the day).

MBS / Treasury Market Data

UMBS 5.5
99.11
+0.39
UMBS 6.0
100.61
+0.22
UMBS 6.5
101.99
+0.18
2 YR
4.6035
-0.1128
10 YR
4.2818
-0.0784
Pricing as of: 7/5 5:59PM EST
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