Bond traders can book profits on bond purchases by selling, or on bond sales by buying.  Today was characterized by the latter.  

Logically, traders bet on higher rates on Wednesday afternoon and again on Thursday morning as Powell delivered a far less friendly message than the most recent Fed statement would suggest.  Whereas the statement didn't mention lower global growth risks, unfriendly potential changes to the Fed's bond portfolio, and the fact that the cut of the Fed's IOER rate had nothing to do with an actual rate cut, Powell DID

As soon as he did, rates started moving higher at the quickest pace in more than 3 weeks.  This morning's jobs report wasn't enough to keep the selling going--perhaps because tepid wage growth and a downtick in the hourly work-week didn't support any inflation theories.  And a lack of inflation is currently the strongest argument the Fed has for remaining accommodative with rates. 

It also didn't hurt today's bond market gains that ISM Non-manufacturing came in much lower than expected.  Nonetheless, 10yr yields only managed a token 1.5bp drop on the day to end at 2.53%.  We'd really need to be trading well below 2.50% to have taken away a positive message on the week.  After all, that's right where we closed out last week.


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
100-31 : +0-03
Treasuries
10 YR
2.5300 : -0.0220
Pricing as of 5/3/19 5:24PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:09AM  :  Bond Rally Continues After Weaker ISM Data
8:42AM  :  Just When You Thought Bonds Were Weaker Following NFP...
8:36AM  :  NFP Stronger. Bonds Weaker, But at a Reasonable Pace (For Now)

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Oliver Orlicki  :  "Well that was a fun week. Have a good one MBSers"
Peter Lassig II  :  "Woah, we're green today?"
Doug Seder  :  "Thought FED removed transitory language from statement on Wed, guess she did not agree"
Matthew Graham  :  "RTRS - FED'S MESTER SAYS WOULD BE CONCERNED IF INFLATION EXPECTATIONS FELL"
Matthew Graham  :  "RTRS - CLEVELAND FED'S MESTER SAYS INFLATION WEAKLESS LIKELY IS TRANSITORY"
Matthew Graham  :  "RTRS - CLEVELAND FED'S MESTER SAYS INTEREST RATES APPROPRIATE WHERE THEY ARE"

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, May 03
8:30 Non-farm payrolls (k)* Apr +263 185 196
8:30 Unemployment rate mm (%)* Apr 3.6 3.8 3.8
8:30 Average earnings mm (%) Apr +0.2 0.3 0.1
10:00 ISM N-Mfg PMI * Apr 55.5 57.0 56.1