Bad news for Economy = Good News for Interest Rates
MBS are up +8/32 (FNMA 30-yr 3.5 at 102.27), around 7/32 higher than yesterday at this time.
Weaker than expected economic data has lifted MBS this morning. June Retail Sales fell 0.2% from May, below the consensus for an increase of 0.1%. Excluding the volatile auto component, Retail Sales also fell 0.2%, below the consensus for an increase of 0.2%. June CPI was flat from May, below the consensus for an increase of 0.1%. Core CPI, which excludes food and energy, rose 0.1% from May, also falling short of expectations. Core CPI was 1.7% higher than a year ago, the same annual rate as last month. June Industrial Production matched expectations with an increase of 0.4% from May. The Dow is up 25 points. Consumer Sentiment will be released at 10:00 et.