This morning's Employment Situation data was much weaker than expected. Even if we give the weather some credit for throwing the numbers off--which is a matter of debate--it was still quite a bit weaker than expected. As such, bond markets are justifiably in stronger territory than before the data, but to some, it may seem like the rally is more tepid than it should be.
This morning's first alert touched on potential reasons for that:
"If there's any saving grace for this data, it's the current private payrolls headline which showed 142k jobs created vs a 185k forecast. If we're to accept that the weather had as much of an impact as some have suggested, this would actually mean today's report is fairly close to consensus. As such, if we see bond markets make no further progress than their initial jolt into positive territory, this might be why. In other words, the mere POSSIBILITY that weather can explain away some of the gap means there's a chance this isn't weak enough for us to see any further progress."
After bouncing almost all the way back to unchanged territory, Treasuries have resumed the rally, but cautiously so. The day-over-day improvement is just 3.8bps at the moment. MBS have been a bit more convicted in their positivity today, but Monday's levels remain elusive.
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