Market commentary

This morning’s August CPI report came in a bit lower that expected, however, overall CPI rose 0.3% for the month and 1.1% year-over-year. The core CPI, which excludes food and energy, was unchanged in August and up a mere 0.9% year-over-year. It was the fifth straight month of sub 1% YOY increases and continued to tie the lowest YOY level since the early 1960`s. Bonds are nicely higher this morning, more than reversing yesterday’s sell-off on the long-end of the curve.
In addition to the CPI report, Reuters/University of Michigan reported its preliminary index of consumer sentiment fell to 66.6 from 68.9 in August. This month’s reading was less than the most pessimistic forecast in a Bloomberg News survey and has helped support the bond market. Mortgage pricing is approximately .125% better than the close on Thursday.