Morning Report – Bond market continues to rally 8/8/14

Posted on August 8, 2014 by Brent Nyitray

Markets are higher this morning on no real news. Bonds and MBS are higher on international tensions. The 10 year bond yield is sporting a 2.3 handle this am.

Nonfarm Productivity rebounded to +2.5% in the second quarter. The first quarter was revised downward to – 4.5%. Unit Labor Costs rose .6%, while the prior quarter was revised upward from +5.7% to + 11.8%. BLS attributes the increase in costs to the downward revision in productivity and and a big upward revision in compensation from .4% to 4.8%. Not sure why BLS’s initial numbers were so far off.

Gutsy call on the bond market: Komal Sri-Kumar is predicting the 10 year will be trading with a 1 handle in six months. He thinks international tensions will be a drag on consumer confidence and he even suggests the Fed could re-start QE in 2015.

FWIW, economists are predicting 2.9% GDP growth in Q3 and 2.6% growth in Q4.

Wholesale sales and Wholesale inventories both came in lower than expected.

Filed under: Morning Report | 57 Comments »