Bond markets came into the session essentially unchanged after having held near the higher end of their recent range in the few days leading up to this morning's jobs report. The headline Nonfarm Payrolls came in at 192k versus a forecast consensus of 200k. But revisions added another +39k to the past 2 months. It's interesting to note that 192k+39k = 231k, which is right about where we should be if job creation stayed flat and weather-related payrolls losses came back into the market (based on these calculations).
That provides two ways to look at today's data. On the one hand, it's reasonably strong, having come in close to consensus and seeing positive revisions. On the other hand, the previous calculations suggested we'd see a few more jobs come back into the market. Perhaps they still will, but for now, it's not the colossal beat that it might have been (April jobs tend to beat big when they beat).
Markets were undoubtedly prepared for a bigger number and the quick bond market rally was evidence of that. Even then, it was only good enough for a moderately sized rally. The next 2 steps forward came courtesy of headlines out of Europe suggesting legitimate testing of a €1 trillion QE package. Whereas we'd normally see Treasury movement dwarf that of German Bunds on an NFP day, today is an exception. NFP made for the 8:30am move, but Europe led the next one:
Since then, slumping domestic equities haven't stood in the way of further bond market positivity, but the close of European markets might. Whatever the case may be, bonds have ceased their rally and moved more sideways since European trading wrapped up half an hour ago.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
96-24 : +0-18
100-25 : +0-17
104-05 : +0-15
| Treasuries || |
0.4186 : -0.0354
2.7298 : -0.0602
3.5854 : -0.0396
| Pricing as of 4/4/14 12:30PMEST |
Morning Reprice Alerts and Updates
10:48AM : ECB QE Headlines: The Real Post-NFP Market Mover
9:27AM : Bond Markets Rally Back to Best Levels; Meeting Resistance Again
8:46AM : Knee Jerk Rally Fighting for Survival After Near-Consensus NFP
Live Chat Featured Comments
Matthew Graham : "RTRS- U.S. MARCH JOBLESS RATE 6.7 PCT (CONSENSUS 6.6 PCT) VS FEB 6.7 PCT (PREV 6.7 PCT)"
Matthew Graham : "RTRS - U.S. LABOR FORCE PARTICIPATION RATE 63.2 PCT IN MARCH VS 63.0 PCT IN FEB"
Matthew Graham : "RTRS- US MARCH PRIVATE SECTOR JOBS +192,000 (CONS +195,000), VS FEB +188,000 (PREV +162,000)"
Jeff Anderson : "Revisions decent."
Matthew Graham : "RTRS- U.S. MARCH AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS UNCHANGED (CONS +0.2 PCT) VS FEB +0.4 PCT (PREV +0.4 PCT), TO $24.30 VS FEB $24.31; MARCH YEAR-ON-YEAR EARNINGS +2.1 PCT"
Matthew Graham : "RTRS- U.S. MARCH AVERAGE WORKWEEK ALL PRIVATE WORKERS 34.5 HRS (CONS 34.4 HRS) VS FEB 34.3 HRS (PREV 34.2 HRS), FACTORY 41.1 VS 40.8, OVERTIME 3.5 VS 3.4"
Sung Kim : "This is a pretty strong report. Almost every component shows job market strengthening "
Victor Burek : "i wouldn't call it pretty strong, but it was decent"
Matthew Graham : "this is 192k vs 200k forecast with a 39k job swing in the revisions"
Matthew Graham : "if markets were truly neutral heading in to this, we'd be selling-off. So as Sung suggests, there was a high level of defense against getting walloped. Actually, I think I suggested that in an article too. "
Victor Burek : "market was definitely priced for a higher number"
John Tassios : "yes I agree, this may be short covering that were leaning the other way"
Hugh W. Page : "market expected more than that. Defensive going in and now this"
Hugh W. Page : "I think we're heading back to the top of the channel where I think we'll get resistance again."
Hugh W. Page : "I mean the FNAM 4.0 channel formed since about beginning of Feb (downward in price overall)."
Hugh W. Page : "With a myriad of complicated global pieces to this global economic conundrum we have I really think these Central Bankers are just perplexed with how to deal with it all. I don't think any of them have a handle on it but they have to put on a good face. "
John Tassios : "Hugh, none of them understand how deep the financial crisis hit and how deep the delveraging process that is still ongoing. All of this id adding to deflationary forces and structurally higher UE and low capacity utilization. It takes years to get out of this loop. Bernanke was correct when he studied the long term affects of great depression in the 30's. It took years back then to get out of that as well"