Inexplicable bond market resilience isn't always about the Eurozone, but sometimes it is, and today is one of those times.

In order to have inexplicable resilience, there must first be explicable (or how about 'understandable' weakness).  That's an easy correlation to spot this morning given the +288k NFP result vs a 212k forecast.

As you'd expect, this made for strong sell-off to start the day.  That said, these post-NFP moves can be much bigger than today's.  Not only that, but the weakest point in the sell-off was seen within the first 5 minutes, with trading levels generally bouncing back after that.

A tame ISM Non-Manufacturing report at 10am helped facilitate the ongoing bounce, but the most important thing it did was to help European bond markets finally make it back to a technical level in German Bunds.  Crossing that level led to a noticeable pick-up in follow-through buying, which in turn led to some of that 'inexplicable' resilience for domestic bond markets.

At this point, MBS are barely any weaker on the day with Fannie 3.5s only down 3 ticks at 102-03.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
97-28 : -0-02
FNMA 3.5
102-03 : -0-03
FNMA 4.0
105-16 : -0-03
Treasuries
2 YR
0.5119 : +0.0239
10 YR
2.6484 : +0.0204
30 YR
3.4831 : +0.0151
Pricing as of 7/3/14 12:05PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:24AM  :  European Bond Markets Helping Treasuries/MBS Recover
9:06AM  :  Bond Markets hit Weakest Levels since Early May After NFP; Mostly Holding Ground Now
8:31AM  :  ALERT ISSUED: For Those With Overnight Price Protection...

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "the customization that you can implement is amazing. Your tech guys are very skilled MG"
Jeffrey Coward  :  "This new site is well done. Thank you for the upgrade."
Victor Burek  :  "I think a lot was baked in...Monday we were 2.51ish"
Clayton Sandy  :  "I'll say it...green by the end of the day! "
Matthew Graham  :  "RTRS - U.S. JUNE AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +0.2 PCT (CONS +0.2 PCT) VS MAY +0.2 PCT (PREV +0.2 PCT), TO $24.45 VS MAY $24.39; JUNE YEAR-ON-YEAR EARNINGS +2.0 PCT"
Christopher Stevens  :  "i think mrkt priced in a beat going from 2.52 to 2.62 butthis beat will surely test a 2.66 close"
Matthew Graham  :  "RTRS- U.S. JUNE JOBLESS RATE 6.1 PCT, LOWEST SINCE SEPT 2008, (CONSENSUS 6.3 PCT) VS MAY 6.3 PCT (PREV 6.3 PCT)"
Matthew Graham  :  "RTRS- U.S. JUNE NONFARM PAYROLLS +288,000 (CONSENSUS +212,000) VS MAY +224,000 (PREV +217,000), APRIL +304,000 (PREV +282,000)"