From bumpy ride to smooth sailing: bonds gained more ground this week than they lost during last week's range-breaking sell-off.  I firmly believe that would not have been the case were it not for the key events of the past 2 days.  Yesterday, it was the surprisingly dovish ECB Announcement.  Today, it was the shockingly weak nonfarm payrolls number.

Sure, we can point to the internal components of the report and make the case that bond traders could have taken away sufficiently positive cues as dissuade a big bond rally, but who are we kidding?  The number was 20k vs a 180k forecast...  That's not the kind of gap that  typically results in one of these paradoxical reactions.

All that to say: I think the paradoxical reaction (where bonds began selling-off shortly after the jobs report) gave us a glimpse into bonds' agenda for the day.  Traders were looking at a very logical opportunity to sell after ECB helped yields get near the bottom of the recent range yesterday.

While we may have defied destiny on some small scale, holding at the bottom of the range today merely delays the same destiny heading into next week.  The range is still a valid trading cue (i.e. there's resistance around 2.62-2.63% in 10yr yields).  That's unlikely to change unless the week's more meaningful economic data is noticeably weaker versus expectations.


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
100-15 : +0-03
Treasuries
10 YR
2.6320 : -0.0040
Pricing as of 3/8/19 4:13PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:27PM  :  MBS at Highs as Afternoon Hours Set New Tone For Bonds
9:42AM  :  ALERT ISSUED: Heads-Up: NFP Rally Completely Erased, Reprice Risk Considerations
8:36AM  :  NFP Tanks, 20k vs 180k Forecast; Bonds Are Indecisive

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Mar 08
8:30 Average earnings mm (%) Feb +0.4 0.3 0.1
8:30 Non-farm payrolls (k)* Feb +20 180 304
8:30 Unemployment rate mm (%)* Feb 3.8 3.9 4.0
8:30 Building permits: number (ml)* Jan 1.345 1.289 1.326
8:30 Build permits: change mm (%)* Jan 1.4 0.3
8:30 House starts mm: change (%) Jan +18.6 -11.2
8:30 Housing starts number mm (ml)* Jan 1.230 1.197 1.078