Bonds Might Have Lost Ground Today if Not For Big Data Surprise

Bonds ended up scratching out modest gains today, but that wasn’t necessarily destined to be the case from the outset.  In fact, sellers took the upper hand between 930 and 10am before being driven off by the staggeringly big drop in job openings via the JOLTS data (read more in the AM commentary).  This slim victory lines up with the notion that the 5 trading days have been all about the bond market de-escalating from the British market drama on Monday and Tuesday of last week.  “Data-dependency” is still the safest bet as far as the next phase of momentum is concerned.  

Econ Data / Events

Job Openings 10.05m vs 11.17m previously – Biggest non-lockdown drop on record

Market Movement Recap

09:03 AM Bonds sideways to slightly stronger at first in the overnight session, then stronger after Australia’s smaller than expected rate hike.  10yr down 4bps at 3.60 and MBS up a quarter point.

09:48 AM 10yr spiking in concert with 9:30am NYSE open, quickly back to unchanged levels.  MBS are still slightly positive but down a quarter point from AM price plateau. 

10:22 AM Nice reversal at 10am, ostensibly with an eye on the big drop in job openings via the JOLTS data.  10yr and MBS both back in line with the day’s best levels. 

01:40 PM Off the best levels and back in line with AM levels.  MBS still up a quarter on the day, but down a quarter from highs.  10yr yields up to 3.617 from lows of 3.562–still down 2.5bps on the day.
Source: Mortgage News Daily