I imagine if you polled a thousand people who were among the most qualified to have an opinion about today's nonfarm payrolls forecast, you'd have been lucky to encounter a single person who would be willing to predict a number over 300k.  I'm not saying that those people couldn't fathom such a thing--simply that there was an overwhelming agreement about the fact that this jobs report would be smaller than the last one.

But then today happened!  In some ways, you could argue last month's report was better, but it doesn't much matter.  All we needed to see was the headline of 304k to know there would be trouble.  In the bond market's defense, there wasn't much trouble until the 10am econ data got involved (ISM manufacturing found a floor and bounced, Consumer Sentiment didn't tank as much as expected a result of the shutdown).  Along with a beat in construction spending, this rounded out a full slate of surprisingly strong data (not majorly surprising, mind you, but in light of the Fed's concern yesterday, it was striking).

So did the Fed make a big mistake by being so cautious Wednesday?  Maybe!  There's absolutely no way to know right now.  In that sense, the Fed couldn't have made a mistake because it simply said it was going to pull the oars in and see what the current was doing before trying to row its boat any more for now.  Bonds haven't even had to give back all of their post-Fed gains yet, so they're suggesting they too will wait and see before jumping to any conclusions about one day of econ data.  It was worth and adjustment in the fervor of bond buying demand, but nothing more until further notice.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 4.0
102-02 : -0-09
10 YR
2.6840 : +0.0490
Pricing as of 2/1/19 7:22PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:09AM  :  ALERT ISSUED: 10am Data Doing Huge Damage
9:59AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
8:55AM  :  ALERT ISSUED: NFP Comes in Mind-Bogglingly High; What Will Bonds Do?
1:43PM  :  ALERT ISSUED: If You Haven't Seen a Reprice Yet, You Probably Will

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "& lowest rates in approx 1 yr"
Timothy Baron  :  "If you had told me last Friday that today would bring strong jobs & manufacturing data and we'd be hanging out around 2.69, I would have said "I'll take it.""
Oliver Orlicki  :  "Had a lot of headwinds this week and we are still well within our range"
Oliver Orlicki  :  "Feel like it could be a lot worse"
Josh Chirchick  :  "U G L Y Day!"

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Feb 01
8:30 Private Payrolls (k)* Jan +296 170 301
8:30 Non-farm payrolls (k)* Jan +304 165 312
8:30 Unemployment rate mm (%)* Jan 4.0 3.9 3.9
8:30 Average earnings mm (%) Jan +0.1 0.3 0.4
10:00 ISM Manufacturing PMI * Jan 56.6 54.2 54.1
10:00 ISM Mfg Prices Paid * Jan 49.6 54.5 54.9
10:00 Consumer Sentiment (ip) Jan 91.2 90.8 90.7
10:00 Consumer Inflation Expectations (1yr) (%) Jan 2.7 2.7
10:00 Consumer Inflation Expectations (5yr) (%) Jan 2.6 2.6
10:00 Factory orders mm (%) Nov 0.2 -2.1
10:00 Wholesale sales mm (%) Nov -0.6 -0.1 -0.2
10:00 Wholesale inventories mm (%) Nov 0.3 0.5
10:00 Construction spending (%)* Nov 0.8 0.2 -0.1