The bond market initially responded to the headline PPI number. Analysts were predicting Producer Price Index to come in at +0.5% to +0.7%. They were surprised when they found that prices at the wholesale level went up +0.9%. That initially caused the 10-year Treasury moved up to 5.251%. which was +.051% from yesterday’s close.

The bond market calmed down when the details were read. The core-PPI was exactly as expected at +0.2%. The core-PPI is more often looked at as the core eliminates the more volatile items like energy in this case.

The bond market looked at the weekly jobless numbers for further direction and found none. The Labor Department reported that Initial Jobless Claims were 311k which was within the range of expectations of 310k to 315k.

As a result, the 10-year Treasury market was up only slightly at +.017% with the rate at 5.217%

Steve Boxmeyer [612] 799 – 6858
steve@LendWithIntegrity.com