Thursday Was Nice, But It’s All About Friday

There wasn’t much for the bond market to sink its teeth into on Thursday.  Traders focused on higher jobless claims numbers right out of the gate with the market reaction FAR outpacing the suggestion from the data.  The reaction also suggests an extreme level of sensitivity to Friday’s jobs report.  In other words, if jobless claims is a gentle breeze of market movement potential, NFP is a hurricane.  The gentle breeze was helpful today, but all that matters in the bigger picture is whether or not the hurricane is blowing in the same direction.

Econ Data / Events

Jobless Claims

211 vs 195 f’cast, 190 prev

Challenger Layoffs

77.77k vs 102.943k prev

Market Movement Recap

08:35 AM unchanged to slightly weaker overnight, but bouncing back a bit after Jobless Claims data.  10yr and MBS currently unchanged (MBS are showing 2 ticks weaker, but they would be unchanged or better if there were liquidity)

11:17 AM Some weakness between 10:15 and 11am, but bouncing back a bit now.  10yr down 1.9bps at 3.97.  MBS up an eighth on the day.

01:28 PM Very decent 30yr auction.  Bonds rallying in response.  10yr down 7bps at 3.919.  MBS up 10 ticks (.31).

03:10 PM Rally stalled out just after 2pm, but gains remain largely intact.  10yr down 6.2bps at 3.927 and MBS still up 10 ticks (.31).
Source: Mortgage News Daily