|10-Year: unch....%.... GNMAs: .... USD/JPY: 113.57.... EUR/USD: 1.1753|
-- Cautious overnight session boosts Treasuries
-- October NFIB Small Business Optimism Index (actual: 103.8; prior: 103.0)
-- October PPI (actual: +0.4%; Briefing.com consensus: 0.1%; prior: 0.4%) and core PPI (actual: +0.4%; Briefing.com consensus: 0.2%; prior: 0.4%)
- The October PPI report revealed a 0.4% increase in the index for final demand (Briefing.com consensus +0.1%) and a 0.4% increase in the index for final demand less foods and energy, also known as "core PPI" (Briefing.com consensus +0.2%).
- A 0.5% increase in the index for final demand services and a 0.3% increase in the index for final demand goods drove the headline surprises.
- On a year-over-year basis, the index for final demand is up 2.8% -- the largest 12-month increase since February 2012 -- while core PPI is up 2.4% versus 2.2% for the 12 months ended in September.
- The key takeaway from the report is that it will create some angst about possible pass-through effects on consumer prices and will help solidify expectations for a December rate hike from the Federal Reserve.
- Yield check:
- 2-yr: unch at 1.69%
- 5-yr: +2 bps to 2.09%
- 10-yr: unch at 2.40%
- 30-yr: -1 bp to 2.86%