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MBS Working day In advance: First Treasury Auction Not The Value Index You&#039re Hunting For

Posted To: MBS Commentary

Even though right now&#039s eight:30am facts has the set off phrase “rate index,” it&#039s not the rate index you&#039re hunting for. That will occur tomorrow in the kind of the Customer Value Index (CPI). Today&#039s Producer Value Index (PPI) measures the shift in input expenditures at the wholesale level. PPI only ever issues if it coincides with an increase in CPI, so markets just believe hold out for CPI when it comes to even bigger bond industry reactions. PPI is only truly practical if it&#039s doing anything so huge that buyers can&#039t assist but believe it will translate to a shift in CPI. Even then, past precedent doesn&#039t suggest a ton of correlation–except it&#039s amongst oil costs and producer costs. As these kinds of, the working day is beginning with PPI at the optimum concentrations in decades but devoid of any incremental…(go through extra)

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