Fri: import prices up 1.1 percent, stocks down 1.1 percent, and no haven bid in bonds or gold. Plan graded.
Written Tuesday October 20, covering Friday October 16; the plan was committed Thursday October 15, before Friday's releases. Import prices rose 1.1 percent (BLS), inside the no-call band. The S&P 500 fell 1.09 percent on chip stocks, triggering the risk-off row, but the 10-year closed 0.9 basis points higher at 5.098 percent and gold $11 lower as Brent rose $4. Grade: no hits, two misses. Real yields fell 4 basis points while the breakeven rose 3 (FRED). Industrial production rose 0.7 percent (Fed G.17).
Written Tuesday October 20, covering Friday October 16. The plan graded below was committed Thursday October 15, before Friday's releases. September import prices rose 1.1 percent, inside the band where the plan made no call. The plan's second leg did trigger: the S&P 500 fell 1.09 percent, led by chip stocks, which the plan classified as risk-off. Risk-off was supposed to mean a lower 10-year yield and a higher gold price than Thursday's levels. Neither happened. The 10-year closed 0.9 basis points higher and gold $11 lower, while Brent rose $4. Grade: no hits, two misses.
This continues Thursday's PPI note, which asked whether the 10-basis-point bond rally during an Asian technology sell-off was a haven bid. Friday was the test: a US technology sell-off. On the plan's measures, the bid did not come back.
What the data said
- Import and export prices, September (8:30 AM ET). Import prices rose 1.1 percent, after a revised 0.5 percent in August, and 8.1 percent from a year earlier. Fuel import prices rose 4.8 percent and nonfuel import prices 0.7 percent (6.0 percent on the year). Export prices rose 2.2 percent, and 11.6 percent on the year (source: BLS U.S. Import and Export Price Indexes, September 2026). The plan's named consensus was Investing.com's 0.9 percent; investingLive put it at 0.8 percent. Above both, but below the plan's 1.4 percent hot threshold. Today's reference piece covers what import prices measure and why the dollar explains less of them than you might expect.
- Industrial production, September (9:15 AM ET). Output rose 0.7 percent after 0.1 percent in August (revised from 0.0). Manufacturing rose 0.3 percent, mining 0.2 percent and utilities 3.5 percent. Capacity utilization rose to 76.9 percent from 76.4, below its 1972-2025 average of 79.4 (source: Federal Reserve G.17, October 16, 2026). The plan's named consensus was Investing.com's 0.4 percent and 76.5 percent. Both beat; utilities did much of the work.
- CFTC Commitments of Traders (3:30 PM ET), positions as of Tuesday October 13. Non-commercial traders were net short 137,573 euro futures contracts, up from 99,332 a week earlier, and net long 50,207 yen contracts, down from 62,325 (source: CFTC legacy futures-only report, public reporting API). For how to read these, see our guide to COT positioning. The positions predate CPI and PPI.
- Chair Warsh, conversation with IMF Managing Director Georgieva at 11:30 PM ET Thursday (Federal Reserve calendar). We have not found a report of what he said and attribute no move to it.
The tape
| Market | Thu Oct 15 reference | Fri Oct 16 (4 PM / close) | Change |
|---|---|---|---|
| 10Y yield | 5.089% | 5.098% | +0.9 bp |
| 30Y yield | 5.429% | 5.436% | +0.7 bp |
| 5Y yield | 4.899% | 4.899% | 0.0 bp |
| DXY (4 PM ET) | 101.982 | 101.779 | -0.20 |
| Gold (GC=F, 4 PM ET) | 4,192.5 | 4,181.1 | -11.4 |
| USD/JPY (4 PM ET) | 158.08 | 157.99 | -0.09 |
| EUR/USD (4 PM ET) | 1.1218 | 1.1242 | +0.0024 |
| Brent (BZ=F, 4 PM ET) | 105.73 | 109.86 | +4.13 |
| S&P 500 | 7,744.06 | 7,659.44 | -1.09% |
Sources: Yahoo Finance query1, using the plan's conventions: hourly 4:00 PM ET bar for DXY, gold, USD/JPY, EUR/USD and Brent; daily close for ^TNX, ^TYX, ^FVX and ^GSPC. Reference levels are the plan's, as committed. DXY's daily close was 101.84.
The equity fall was in technology. The Nasdaq composite fell 2.1 percent and the Dow 0.3 percent; the AP's market recap tied the decline to chip stocks, with Micron down 5.6 percent and Intel 5.8 percent, and said the S&P 500 and Nasdaq had their worst week since June (via La Nación's republication). Brent settled 3.7 percent higher at $109.86; Stockti attributed the rise to continuing Middle East supply risk. We did not verify a specific supply event.
Why the 10-year did not fall
Treasury's official curve splits Friday this way: the 10-year yield fell from 5.10 to 5.09 percent, the 10-year TIPS yield from 2.78 to 2.74, and the 10-year breakeven rose from 2.32 to 2.35 (sources: FRED DGS10, DFII10, T10YIE). Real yields fell for a third straight day, the shape of a haven move. Inflation compensation rose by almost as much, on a day Brent gained $4 and import prices came in above consensus. The two roughly cancelled.
Two caveats, stated plainly. First, the plan grades on Yahoo's ^TNX close, which shows +0.9 basis points; Treasury's end-of-day curve shows -1. Under either measure the move is too small to call a haven bid, and the grade uses the plan's measure. Second, the 10-year rose 2.5 basis points overnight (^TNX opened New York at 5.114) and fell 1.6 basis points during the New York session as stocks fell. A haven bid inside New York hours existed. It was small and it started from a higher level.
Grading the plan
The plan had two legs. Leg A classified September import prices (all imports, month on month, one decimal): hot at 1.4 percent or more, cool at 0.4 percent or less, no call in between. Leg B classified the S&P 500 close against Thursday's 7,744.06: risk-off at down 1.0 percent or more (10-year closes below 5.089 percent, gold above 4,192.5 at 4:00 PM), risk-on at up 1.0 percent or more. Classification: import prices 1.1 percent, no call; S&P 500 -1.09 percent, risk-off.
| Line in the map | Expected | Actual at close | Grade |
|---|---|---|---|
| Leg A hot (≥ 1.4%): 10Y up 3 bp, DXY up | if triggered | imports 1.1% | Not triggered |
| Leg A cool (≤ 0.4%): 10Y down 3 bp, DXY down | if triggered | imports 1.1% | Not triggered |
| Leg A neither (0.5% to 1.3%) | no call | imports 1.1% | No call |
| Leg B risk-off: 10Y yield | closes below 5.089% | 5.098% (+0.9 bp) | Miss |
| Leg B risk-off: gold (4 PM) | above 4,192.5 | 4,181.1 (-11.4) | Miss |
| Leg B risk-on (S&P up ≥ 1.0%) | if triggered | S&P -1.09% | Not triggered |
| Conflict rule (opposite 10Y calls) | void both 10Y lines | Leg A made no call | Not applicable |
| Industrial production, export prices, COT | recorded, not graded | IP +0.7%, CU 76.9%; exports +2.2%; COT above | Recorded |
| Warsh window (record a 5 bp / 0.3 move before 8:30) | record if triggered | 10Y +2.5 bp at the first New York bar; DXY low 101.58 around 6:30 AM (-0.41) | Recorded: DXY crossed 0.3 |
The tally is no hits, two misses, no voids. Said plainly:
- The 10-year miss is narrow and real. The plan assumed a risk-off day in stocks means a lower 10-year yield. Friday's risk-off came with higher oil, and the inflation part of the yield rose as the real part fell. The plan had no oil condition, and it should have.
- The gold miss is not narrow. A haven bid that does not show up in gold on a 1.1 percent equity fall is not much of a haven bid. Gold rose to about $4,218 shortly after 10:00 AM and gave it back.
- The Warsh-window record. DXY was 0.15 lower by the end of the 11:30 PM bar and kept falling overnight, to about 101.58 near 6:30 AM, more than the plan's 0.3 threshold. It was 101.72 at 8:30 AM. The plan said to record such a move; the grade stands, and DXY was not graded. We do not know whether the overnight move was about Warsh.
Event-window record (not graded). 8:30 to 9:00 AM ET: DXY from 101.72 to 101.79, gold from about 4,197 to about 4,187, USD/JPY from 157.96 to 158.05, and the 10-year from 5.114 to 5.106 percent between the 8:20 and 8:50 bars (-0.8 basis points). From the 8:30 level to the close: DXY +0.06, gold about -16, 10-year -1.6 basis points (Yahoo 30-minute bars). Import prices moved nothing measurable, which is what the plan's wide no-call band assumed.
The record. October 2: no hits in four. October 7: two hits, one miss, one void. October 8: nothing triggered. October 14: two hits, two misses. October 16: no hits, two misses. The asymmetry hypothesis (a hawkish input moves the 10-year up more than a dovish one moves it down) gets no observation from Friday, because Leg A made no call.
Thursday's open question
Thursday's note could not say whether the Asian sell-off caused the bond rally. Friday adds one data point. An equity sell-off concentrated in technology came with falling real yields again, but not with falling nominal yields or rising gold. Either the haven bid was weaker than Thursday's, or oil overwhelmed it. One day cannot separate the two. The guide to supply-shock versus growth-shock bond rallies explains why a supply shock (oil) can push the two parts of a yield in opposite directions.
Thursday's two conditional statements, so far
- 10-year below 5.190 percent on every close through Friday October 23. Friday 5.098, Monday 5.136 (^TNX). Not falsified so far; graded after October 23.
- 10-year breakeven (T10YIE) at or below 2.35 through October 23 with Brent above $100; wrong at 2.38 or higher. Friday 2.35, Monday 2.35, both at the limit. Brent above $100 throughout. Not falsified so far.
What we do not know
- What moved the dollar overnight. DXY fell about 0.4 between Warsh's appearance and 6:30 AM. We have no report of his remarks and no flow data.
- What moved oil. News reports pointed to Middle East supply risk in general terms. We did not identify a single event.
- Fed pricing. We did not read CME FedWatch on Friday and report no number for it.
What would change the read
Monday October 19 is covered in the next note. Because this piece was written after Monday's close, it adds no conditional statement of its own: anything it said about Monday would already be known. The forward-looking statements for this thread are in Thursday's note and the Monday note. No plan has been registered for Tuesday or later.
What to read alongside
- Import prices and dollar pass-through (today's reference piece)
- Real yields
- Breakevens
- Event windows
Nothing on this site is investment advice or a recommendation to trade. Most retail traders lose money. Reaction maps published here are falsifiable hypotheses, graded in public, not signals.