Government Shutdowns come and go (and may come again), but our more constant companion since May has been the ongoing trial of Fed Asset purchases. The court of popular opinion quickly determined that QE wouldn't be long for this world back in May and June, but had a change of heart following August's NFP (on September 6th). This was soon confirmed when the 10 angry men and women emerged from deliberations on September 18th with their "no tapering" verdict.
That ushered in another month of positivity for bond markets, and polls showed that QE might remain unaffected until March 2014. But today's Jobs report constitutes the admission of new evidence--damning evidence, some would say--that shifts the consensus back toward the nearer term.
If 3.0% in 10yr yields had represented the greatest risks of near-term tapering and if 2.5% had represented the "tapering on hold" philosophy, then heading out the door at 2.75% today makes pretty good sense (at least if you can get past the indignation of the fairly substantial swing in payrolls, plus the positive revisions to past reports).
Some media outlets are making a case to take these jobs numbers with a grain of salt, but that didn't change anything about what markets did with the data, nor will it unless the next report bears out the counterpoints. Next week begins on Tuesday due to the Veterans Day Holiday on Monday (bond markets closed), and is pretty quiet in terms of economic data.
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Live Chat Featured Comments
Andy Braun : "Exactly, I cant tell me how many times today Ive been asked what the heck is going on...Im like well, my loand are all locked, you should suscribe to MND"
Tim Yazawa : "Told my managers about today three days ago, they didn't pass along the info to our LO's, No one locked, if only they subscribed to MND..."
Victor Burek : "liesman saying drop in participation rate not due to govt shut down"
Matthew Graham : "RTRS- LOCKHART SAYS WOULD NOT RULE OUT DECEMBER TAPER BUT DATA BETWEEN NOW AND THEN WILL STILL HAVE SOME NOISE "
Matthew Graham : "RTRS- FED'S LOCKHART: OCTOBER JOBS REPORT ENCOURAGING, BUT SHOULD NOT DRAW TOO MANY PROFOUND CONCLUSIONS FROM ONE MONTH'S NUMBER "
Joe Daquino : "I locked an ARM today as pricing was only .125 worse than yesterday. Super close on the DTI so didn't want to take any chances."
Matt Hodges : "fyi for anyone with a late IRS filer... i'm refi'ing my NOO, i filed electronically on 10/15 and my transcript came back today "
Roger Moore : "seems like the best comp plan is keeping it super simple. "
AQ : "wait til CFPB starts going after loan officers"
Clayton Sandy : "Guaranteed that other lenders are doing it the way C&C were/are doing it. Hopefully they're freaking out about now"