Yesterday treasuries posted modest gains after the substantial sell-off with the support of a strong 7-Year note auction. This morning the market opened with treasuries slightly lower across the curve, but has since rallied after a weaker-than-expected Q4 GDP data was released. The UST10-Year yield is currently at 2.494% after closing at 2.504% prior.
In the first estimate of Q4 2016 GDP, growth reportedly increased by 1.90% versus a 3.50% expansion in the third quarter; economists expected a 2.20% fourth quarter growth. Personal Consumption was the biggest contributor to growth, which rose 2.50% following a 3.00% rise in Q3. GDP Price Index and Core PCEQoQ were in line with expectations, coming in at 2.10% and 1.30% respectively. Durable Goods Orders fell for a second month in a row, dropping 0.40% in December versus an expected 2.50% increase.
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In the first estimate of Q4 2016 GDP, growth reportedly increased by 1.90% versus a 3.50% expansion in the third quarter; economists expected a 2.20% fourth quarter growth. Personal Consumption was the biggest contributor to growth, which rose 2.50% following a 3.00% rise in Q3. GDP Price Index and Core PCE QoQ were in line with expectations, coming in at 2.10% and 1.30% respectively. Durable Goods Orders fell for a second month in a row, dropping 0.40% in December versus an expected 2.50% increase.
At 7:00 AM (PT), the final print for January University of Michigan Consumer Sentiment is expected to hold at the 98.10 level seen in the preliminary reading.
The curve has bull-flattened with the UST 10-Year down 1.0 bp from prior closing.
Have A Nice Weekend!