At first glance, this morning's ADP Employment data may have been cause for bond market concern.  It wasn't that the headline was much higher than expected.  In fact, it was lower!  But the revision to the previous month was quite a bit higher (300k vs 213k).  

Fortunately, this is ADP we're talking about, not to mention the fact that revisions aren't nearly as big of a deal as more timely headlines.  For instance, if ADP came in THIS month at 300k vs 213k, you'd likely have seen traders quickly repositioning for increased risks of a bigger NFP number.

With all of the above in mind, bonds were able to digest the ADP data without losing much ground.  When stocks began sliding at the 9:30am NYSE open, bonds were happy to ride those coattails (lower yields and modest MBS gains by the close) as both sides of the market waited to see what the European Central Bank has to say tomorrow morning.


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 3.5
100-03 : +0-02
Treasuries
10 YR
2.6930 : -0.0290
Pricing as of 3/6/19 5:00PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:41AM  :  Modest Weakness After ADP, But Contained For Now

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "valid concern SP--always the case with NFP forecast being lower than recent average. Fortunately, the payroll count isn't quite as potent these days as the broader view of the report (LFPR, UE, Wages)"
Matthew Graham  :  "also, if we view the supply of jobs over a longer time horizon (e.g. "there will be x number of jobs created this year), then a higher number one month would imply a lower forecast going forward. Also, there may be something going on with benchmark revisions, but i'd have to look into that before commenting intelligently"
Matthew Graham  :  "180k isn't a low number so much as 304k is a high number"
Spencer Packer  :  "Seems silly to expect such a low number after blockbuster numbers in January and February, doesn't it?"
Spencer Packer  :  "MG, can you tell me why the market expectation is that NFP will come in at 180k when last month was 304k?"
John Tassios  :  "agreed MG. FED's 3rd mandate = S&P 500"
Matthew Graham  :  ""tighter financial conditions" = fed's code word for "stock sell-off""
Matthew Graham  :  "bingo"
Victor Burek  :  "stock market?"
Matthew Graham  :  "There's that phrase again: "financial conditions." We all remember what that means?"
Matthew Graham  :  "RTRS - FED'S WILLIAMS SAYS TIGHTENING OF FINANCIAL CONDITIONS IN 2018 WILL RESTRAIN CONSUMER, BUSINESS SPENDING IN 2019"
Matthew Graham  :  "RTRS - FED'S WILLIAMS SAYS OUTLOOK IN EUROPE AND CHINA HAS BECOME LESS BRIGHT, WITH DOWNGRADE TO EUROPEAN OUTLOOK 'NOTABLE'"
Matthew Graham  :  "RTRS - FED'S WILLIAMS SAYS CURRENT FED FUNDS RATE OF 2.4 PCT PUTS US AT NEUTRAL"
Matthew Graham  :  "RTRS - FED'S WILLIAMS SAYS, FROM MONETARY POLICY PERSPECTIVE, ECONOMY IS ABOUT AS GOOD AS IT GETS"

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Mar 06
8:15 ADP National Employment (k)* Feb 183.0 189 213
Thursday, Mar 07
8:30 Productivity Revised (%) Q4 1.6 2.2
8:30 Labor Costs Revised (%) Q4 1.6 1.2
8:30 Continued jobless claims (ml) w/e 1.775 1.805
8:30 Jobless Claims (k) w/e 225 225