This morning's commentary was titled "NFP Doesn't Matter (Even If It Looks Like It Does)."  Apparently NFP didn't like being called out because it did everything in its power to prove me wrong.  Ultimately though, it would need to create momentum that lasts beyond today in order to join the ranks of jobs reports that have been this much stronger than expected.  As it stands, it wasn't able to create momentum that lasted more than 5 minutes.  Those 5 minutes were fairly brutal however.

By 8:35am, 10yr yields had launched from 1.79-ish to nearly 1.86%.  They stayed in that range for more than an hour, but for those of us drinking the "NFP doesn't matter" kool-aid, the writing was already on the wall.  Here it was: an obligatory knee-jerk reaction to a massively stronger-than-expected report with an epic history motivating more bond market movement than any other report.  A modest recovery followed, but it was more than enough to prove the point.  

Go back more than a year or two with the same sort of data and we'd be looking at 6-16bps of weakness in Treasuries.  As it stands, we got 3bps--an amount we sometimes see for absolutely no reason at all.  The damage is even easier to stomach for MBS which lost only 2 ticks (0.06).  

Next week brings a Fed announcement and next weekend brings the much-awaited tariff deadline for China.  Markets are on pins and needles wondering if anything is going to happen before then (and assuming something probably will).

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
101-08 : -0-03
10 YR
1.8430 : +0.0480
Pricing as of 12/6/19 3:30PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:35AM  :  ALERT ISSUED: NFP Explodes Higher (and yields doing same)

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "TB, our knives here at the MBS Live Forge are guaranteed to cut through most things, but mainly the BS."
Wendy Smith  :  "KR--5 years and counting! Wearing my MBSLive gloves daily and I'm a believer!"
Timothy Baron  :  "Will they cut through and aluminum can?"
Kirk Rasmussen  :  "Wendy, I strongly recommend a pair of MBSLive gloves for those falling knives"
Wendy Smith  :  "I'm reminded what a "falling knife" it can be trying to time pricing and rate locks. I locked files last week before and after the holiday. Didn't want to risk it on Monday. And then it turns out that Tuesday was the best day to lock--but that was gone in a day. Tricky business we're in. As MG says over and over again, it can't be predicted."
Dan Shapiro  :  "surprised at how bonds are hanging in there... to me it should be much worse... relative strength..this is a good sign IMO."

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Dec 06
8:30 Non-farm payrolls (k)* Nov +266 180 128
8:30 Unemployment rate mm (%)* Nov 3.5 3.6 3.6
10:00 Consumer Sentiment Dec 99.2 97.0 96.8
10:00 Wholesale inventories mm (%) Oct 0.1 0.2 0.2