Rates Rise on Strong Quarterly Data

Rates rise on strong economic data. Rates were up across the curve today following quarterly PCE and GDP data, which were roughly in-line with prior levels. Rates rose most in the front-end of the curve, with the 2-year yield climbing by ~6bps to 4.27% while the 10-year rose ~2bps to 3.68%. Tomorrow’s shortened trading day will be highlighted by Personal Income and Spending data along with PCE. Equities were also down on the news, the S&P 500 declining ~1.50% to 3,822 and the NASDAQ declining ~2.00% to 10,476.

PCE Preview. Following last month’s slight inflation decline, markets will be focused on tomorrow’s print for signs of a continued deceleration in inflation rates. MoM PCE for November is expected to be 0.1% vs. 0.3% in October, and core PCE is expected to be 0.2%, in-line with last month. YoY, PCE is expected to be 5.5%, vs 6.0% last month. 

Day Ahead. Tomorrow’s November PCE data will be released at 8:30 AM EST, also watch for Durable Goods Orders at 8:30 AM EST, and New Home Sales at 10:00 AM EST.