Good morning! This morning, the bond market is reacting to a full slate of economic data releases, that includes Empire Manufacturing report, Retail Sales, and the Producer Price Index (PPI). The Empire State Manufacturing Index fell to -9.2 in May, indicating continued contraction in New York State manufacturing. Retail Sales rose by 0.1% in April, below expectations, and the Retail Sales Control Group fell by 0.2%. The PPI for April decreased by 0.5% versus economists’ estimates of +0.2% (a massive whiff), with Core PPI down 0.4% vs +0.3% expected (another massive whiff).
Following these reports, Treasuries firmed slightly, with the 10-year yield falling to 4.51%. The softer PPI reading suggests an increase in the likelihood of a Fed rate cut sooner – September is currently the likely meeting for the Fed’s next rate cut according to futures markets. Also, mortgages are welcoming the weaker inflation reading; rallying for the first time this week.
https://www.bisnow.com/dallas-ft-worth/news/office/corporate-relocations-quintuple-texas-destination-california-departure-129345
