Posted To: MBS Commentary

Bonds Fail to Capitalize on Super Weak Jobs Report Nonfarm Payrolls came in at 266k compared to a median forecast of 978k. That's one of the biggest misses ever and it was no surprise to see bonds rally significantly in response. It was definitely a surprise to see how quickly and completely the rally was erased in subsequent hours. There are several potential reasons for this. Traders could simply be skeptical that the headline NFP number speaks to the labor market reality, or they could fear the Treasury issuance implication (i.e. weaker jobs = more stimulus = more Treasury issuance = higher rates). Other considerations include next week's looming auction cycle and good, old-fashioned profit taking after a steadily bullish week for bonds, to name a few. Econ Data / Events Fed MBS…(read more)

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Source: Mortgage News Daily