Do Bonds Care About Jobs Data Again?

Yesterday it was the ISM Manufacturing data that moved the bond market.  Today, even though there wasn’t much movement, the AM jobs data arguably prevented some weakness.  After months of focusing on nothing but inflation, bonds increasingly find themselves concerned with the economic implications of certain reports.  With that in mind, tomorrow’s non-farm payrolls data is probably more important than it has been in many months.  Today’s video discusses why this transition might be happening with the help of “real” (inflation-adjusted) bond yields.  

Econ Data / Events

Fed MBS Buying  10am, 11:30am, 1pm

Jobless Claims 200k s 210k f’cast, 247k prev Labor Costs 12.6 vs 11.6 f’cast, 11.6 prev ADP Employment 128k vs 300k f’cast, 202k prev

Market Movement Recap

08:35 AM Almost perfectly flat overnight and modestly stronger over the past few hours.  10yr down 1.5bps at 2.897 and MBS starting the day up 3 ticks (0.09) at 99-24 (99.75).

11:08 AM 2-way volatility surrounding OPEC supply announcement and NYSE Open.  10yr now roughly unchanged and MBS once again 3 ticks (.09) higher on the day.

02:59 PM Steady gains in MBS with 4.0 coupons up a quarter point at 99-30 (99.94).  10yr yields are still up half a bp at 2.917.
Source: Mortgage News Daily