Last week saw an apparently important jobs report ATTEMPT to have a lasting impact on financial markets only for the move to be completely erased by this morning.  Labor market data was already a bit of an outcast owing to its consistently strong performance in recent months/years (i.e. labor market strength is the rule, not the exception.  Therefore, the strong report is less of a surprise and thus less of a market mover).   

But if we could only pick one reason for markets to ignore jobs data (or MOST data for that matter), it's the uncertain economic implications of an eventual trade deal.  That also helps explain all of today's intraday volatility as bond yields were bumped up early in the domestic session by one batch of headlines and then again about an hour later by another batch of headlines.  The moves weren't huge, but they were the only detectable instances of cause & effect between data/headlines and market movement.

We should mostly expect tomorrow's Fed announcement to have its thunder stolen in the same way.  That's not to say the Fed doesn't matter--just that it matters much less than normal right now.  The case for such claims is only strengthened by the fact that the Fed is almost 100% certain to keep rates unchanged tomorrow.  As such, the extent of the impact would have to come from verbiage changes or interpretations of changes to the Fed's rate outlook.  Both would have to be taken with a grain of "uncertainty salt" due to trade negotiations. 


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 3.0
101-06 : -0-02
Treasuries
10 YR
1.8420 : +0.0110
Pricing as of 12/10/19 5:14PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:53AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
8:41AM  :  ALERT ISSUED: Bonds Snap Back to Unchanged Levels After Trade Headline

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Dan Shapiro  :  "looks like the USMCA was already priced in"
Matthew Graham  :  "Ho-Hum+ then"
Hugh W. Page  :  "I'm sorry but by definition a B+ is better than Ho Hum."
Jason Choi  :  "pretty ho-hum = B+ ?"
Matthew Graham  :  "pretty ho-hum"
Matthew Graham  :  "PRIMARY DEALERS TAKE 24.53 PCT OF U.S. 9-YEAR 11-MONTH NOTES SALE, DIRECT 19.35 PCT AND INDIRECT 56.12 PCT"
Matthew Graham  :  "9-YEAR 11-MONTH NOTES BID-TO-COVER RATIO 2.43, NON-COMP BIDS $6.42 MLN"
Matthew Graham  :  "U.S. SELLS $24 BLN 9-YEAR 11-MONTH NOTES AT HIGH YIELD 1.842 PCT, AWARDS 74.25 PCT OF BIDS AT HIGH"
Matthew Graham  :  "10yr auction average stats: Bid to cover 2.49x, Indirects, 62%, and current yield projection of 1.846, For more on these terms, read this: Treasury Auction Jargon, Definition, and Significance "

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Dec 10
8:30 Productivity Revised (%) Q3 -0.2 -0.1 -0.3
8:30 Labor Costs Revised (%) Q3 2.5 3.3 3.6
13:00 10-yr Note Auction (bl)* 24
Wednesday, Dec 11
7:00 MBA Purchase Index w/e 269.4
7:00 Mortgage Refinance Index w/e 1925.7
8:30 Core CPI (Annual) (%)* Nov 2.3 2.3
14:00 FOMC rate decision (%)* N/A 1.625 1.625