Huge Jobs Numbers and a Logical (But Muted) Bond Reaction
There were "whisper" numbers earlier this week suggesting nonfarm payrolls could come in closer to 1 million as opposed to the median forecast of 647k. And that's not too far from reality (916k). Unemployment ticked down. Participation ticked up. Hours were WAY up. At other points in economic history, this big of a beat would have yields screaming higher, but so far today, they're only spiking moderately. It seems unlikely that they'll break above the recent highs before the 12pm early close. Either way, we're still waiting on next week to cast the official vote on this week's defense of the 1.75+ 10yr yield ceiling.
Fed MBS Buying 10am, 1130am, 1pm
Nonfarm Payrolls 916k vs 647k f'cast, 468k prev
U/E Rate 6.0 vs 6.2
Participation rate +0.1
Workweek 34.9 vs 34.7 f'cast, 34.6 prev
Quick but moderate weakness after the much stronger jobs report. 10yr yields up 2bps to 1.695. UMBS 2.5 down an eighth on the day at 102-19 (102.59).
Bonds lost ground heading into the 12pm early close, but not too much more than they'd already lost by the time of the last update. 10s ended up 4bps at 1.714 and 2.5 UMBS were down just over an eighth of a point at 102-18 (102.56).