Treasuries and mortgages were lower early, prior to 8:30 data. At 8:00 the 10 yr was -1/32 and mortgages unchanged. At 8:30 data flowed; August PPI up 2.7% with the core (ex food and energy) +0.2%----both were higher than expectations. August retail sales were a lot stronger than we or the markets were expecting; up 2.7% overall and when autos are extracted a strong 1.1%. We were expecting retail sales ex autos at +0.4%.

The N Y Empire State manufacturing index was also better; at 18.8, from 12.08 in August; markets were looking for 15.0 on the overall. New orders were up t0 19.84 frm 13.43 in August and employment did dip a little, to -8.3 frm -7.45. Any reading over zero is considered expansion.

The initial reaction to the three reports wasn't good for the bond and mortgage markets; at 8:40 the 10 yr note -11/32 to 3.46% +4 BP; mortgage prices were down 6/32.
Time 12:30 edt:

Treasuries and mortgage markets opened weaker this morning and fell further in price on the 8:30 economic data. The NY Empire State manufacturing index, the surprising increase in August retail sales sent the 10 yr note to 3.49% and mortgages about 10:30 were off 11/32. There was little reaction or interest in the jump in August PPI; stronger than expected but markets are not concerned that inflation is a worry point yet.
Stock markets started strong on the data but so far have spent most of the session hanging around unchanged.