MBS Day Ahead: What's In a GDP Report?

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Posted To: MBS Commentary

GDP was hotly anticipated this week and rightfully so. The trading reaction has been the week's most volatile and has carried the most volume. Paradoxically, the 3.2% vs 2.0% reading resulted in a bond market RALLY (just the opposite of what anyone would expect from such a big beat). To understand why this is happening, we need to look more deeply into the nuances of the report. Warning ! The following table of data is obviously huge and potentially overwhelming at first glance. I've taken the liberty of highlighting a few key ingredients. The red circles are the main sub-headings of the GDP number. They add up to the 3.2% total (3.18% technically, but the report is always rounded to the nearest 0.1%). The red circles are unimportant for the purpose of our conversation today. I just...(read more)

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8c4aa980 340d 444e 894b e1db91cf2b8f c8b94f55 602b 4a22 9e46 fb44d56252bd 2f5033e4 f31e 40f0 8f66 c021a35bebc2 18c98e21 1391 4dc6 a4a0 1d2502e4449a 39148cf3 5d28 4967 8ffb 6f6802cb956d a78a3f04 96d0 4b5a 8c13 ede8745a89e1 08cf9bfd 7f87 491e 9f4f 78d3812ede20 5536bdc4 7993 4778 8c7b b51ca244cbed f1546d86 5aac 4acf bcd2 39f41552f3b1 62859eed 8a13 429c 8e14 7e81cd747075 39f88762 b5df 48f4 ab6a 4862d9091c0b 12df7f04 f5c5 4656 933f 77bcc0f7f9ce 1d78191c f456 4eae b6bd 85906c148d84 ae53dd8a bc18 422f a53f e4f85588e994 2b4fcfd7 c013 405a ba24 d4c51fc9ced4 5adaa0b3 ee74 4e47 8c2b 1b65c5a62bc2 fdccf022 9b3d 437c 9b0a c53cf51c8633 464f01cd 71a7 41c1 a3b9 f9c07fef12d1 f3ef4e9a 9b4d 41ac 941b 35060226d61d d09b8a4f 3c7e 4b9b 8356 683b165ec4f6 c628539c 4fa1 410f b96a 957558e7c1f5 679537ea 8945 46ff a975 9e1cfa75f84a e3fa9037 a94f 40b4 91f0 95efcc0db8a6