Is It The Jobs Report, The Fed, or Something Else?

It’s been quite a week of losses for the bond market.  While Wednesday’s Fed Minutes and Friday’s Jobs Report stand out as discrete sources of inspiration, it’s worth remembering that Monday was easily the worst day of the week for bonds.  Today’s recap video discusses that phenomenon as well as why the weaker NFP number led to more selling.

Econ Data / Events

Fed MBS Buying  10am, 11:30am, 1pm

Nonfarm Payrolls 199k vs 400k f’cast, 249k prev Unemployment Rate 3.9 vs 4.1 f’cast, 4.2 prev Wages  0.6 vs 0.4 f’cast, 0.4 prev participation rate unchanged

Market Movement Recap

08:38 AM Small volatility after NFP, but bonds now losing ground despite weaker jobs number.  10yr up 3.4 bps at 1.762.  MBS down 6 ticks (.19).

10:46 AM Additional weakness as markets continue to trade the monetary policy implications of today’s NFP.  10yr up 5+bps at 1.78 and MBS down 3/8ths.

03:56 PM Trading levels hit their weakest levels at noon and have been consolidating since then.  10yr yields hit the 3pm close right in line with the 1.77% technical level.  MBS were down more than half a point briefly, but are now back to being down “only” 3/8ths.
Source: Mortgage News Daily