This morning's jobs report was stunningly weaker than expected, with NFP coming in at 74k vs a consensus forecast of 196k.  As far as misses go, this was a big one, eclipsing the the last major example in April, when March's NFP came in at 88k vs 200k.  History may be the guide that's preventing a more frenzied reaction as that 88k was ultimately revised to 176k two months later.

All that having been said, the reaction has still been strongly positive for bonds.  10yr yields are down to 2.88's and Fannie 4.0s are up 20 ticks.  But the news isn't exclusively positive.

On a practical level, we can plainly see that 20 ticks (20/32nds) = .625.  While it's standard operating procedure for lenders not to pass along the full breadth of MBS gains right away, the relatively small improvements on some rate sheets (.125-.25) is disconcerting. 

On a technical level, and looking specifically at Treasuries, it could also be disconcerting that we're hitting resistance at 2.88, despite it being encouraging to break the longer-term uptrend.

10 Treasury Yields, Inflection Point at 2.88?

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
95-23 : +0-28
FNMA 3.5
100-01 : +0-24
FNMA 4.0
103-19 : +0-21
2 YR
0.3819 : -0.0471
10 YR
2.8764 : -0.0886
30 YR
3.8106 : -0.0624
Pricing as of 1/10/14 12:50PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:49AM  :  Edging Up Into Positive Reprice Territory
8:37AM  :  ALERT ISSUED: Nonfarm Payrolls +74k vs +196k Forecast; HUGE Miss; Bonds Rallying Big

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "very good Day Ahead read"
Matthew Graham  :  "RTRS- U.S. DEC NONFARM PAYROLLS +74,000, SMALLEST RISE SINCE JAN 2011 (CONSENSUS +196,000) VS NOV +241,000 (PREV +203,000), OCT +200,000 (PREV +200,000) "
Tim McNerney  :  "wow LPR down...lowest since feb 1978"
Jude Bridwell  :  "Blamed on weather probably"
Scott Valins  :  "geeze how does such a low number print? Makes the whole measurement process seem suspicious."
dustin mcalister  :  "after this what is the next thing that has to happen/report to shift rates lower?"
Hugh W. Page  :  "ADP Report showed surge in construction workers and NFP showed plunge. "
Matthew Graham  :  "Dustin, nothing. This won't push rates much lower unless the next one is like this too. "
Christopher Stevens  :  "Market will be very interested in Retail Sales# 1/14 and Yellen on 1/30"
Matthew Graham  :  "You should probably read the Day Ahead HP, if you haven't already. The link to their methodology actually addresses that."
John Tassios  :  "Bond trader mentioned that yesterday at Bloomberg radio, MBS issuance is way down due to declining volumes and FED nows buys ALL of the new MBS issued"
Matthew Graham  :  "much more than 100% of new issuance"
Matthew Graham  :  "it was "close" before origination tanked"
Matthew Graham  :  "watching my twitter feed, I'm about to flip out on everyone who's so shocked about LFPR. I think the movie WALL-E should be required viewing. If you don't know what I'm talking about, Netflix it this weekend."
Matthew Graham  :  "For those who aren't following me on this crazy tangent, society ends up fat, lazy, and floating around on hovering wheelchairs in red jumpsuits because they don't need to work on their spaceship in a battlestar galactica sort of way. in Wall-E, the LFPR would be very low."
Andy Pada, Jr.  :  "Fischer gets nominated as Vice Chair"
Scott Garner  :  "It was reported that job growth the last 2 years was about the same. If that's the case, and the Fed has tied tapering to the labor market, why are we tapering now?"
Matthew Graham  :  "tapering is only MOSTLY about the labor market. It's partly about them wanting to be out for other reasons (limited efficacy from incremental increases and potential disruptions to proper market functioning). Also, Bernanke said in March 2013 that they're just looking for "near-term momentum." They wanted an ongoing average of 150k-250k jobs/month sustainably, and they got it, so = taper."