If there was ever a time when economic data was inconsequential as a market mover, the post-covid era is surely a front-runner. That said, we know this dynamic will begin to change as the temporary distortions and volatility work themselves out. We've already seen bonds react to nonfarm payrolls a few times--even if only temporarily. As such, we're unable to dismiss the jobs report as a non-event. Bonds seem to be starting out the current week erring on the side of caution, in case the data reignites a bullish case for the labor market.
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Fed MBS Buying 10am, 1130am, 1pm
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ISM Manufacturing 61.2 vs 60.9 f'cast, 60.7 prev
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Construction Spending 0.2 vs 0.5 f'cast, 1.0 prev
Much weaker overnight with most of the damage happening in low-volume futures trading during Asian market hours. Things haven't improved during European hours or early in the the domestic session for that matter. 8:20am CME open saw more volume and selling, thus suggesting a "new month" positioning move.
Bonds are recovering a but as we head into the end of the European trading session (though not necessarily because of it). 10yr yields now up only 3.4 bps to 1.615% and 2.5 UMBS down less than an eighth on the day.
After rallying into the PM hours, bonds have been flat in a very narrow range. Trading levels are the same as the last update although MBS have gained another tick (0.03) and are now down only 2 ticks (0.06) on the day.
MBS Market Alerts
