The date and underlying events may have changed, but the price action in MBS was strikingly similar. Prices fell abruptly in the first 2 hours and then reversed at 10am, ultimately making it back near unchanged levels by the afternoon. Data played more of a role today with ADP and S&P Global PMI adding to the weakness early. ISM Services PMI was right in line with the S&P version, but it was very different in terms of price/inflation measurements (lowest price index in 4 years). Fed Chair Powell helped in the afternoon as he maintained that recent econ data is an acceptable bump on the road to rate cuts.
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- ADP Employment
- 184k vs 148k f'cast, 155k prev
- ISM Services
- 51.4 vs 52.7 f'cast, 52.6 prev
- ISM Employment
- 48.5 vs 48.0 prev
- ISM Prices
- 53.4 vs 58.6 prev
- ADP Employment
Only slightly weaker overnight, but more selling after ADP employment. 10yr up 3.6bps at 4.381. MBD down 6 ticks (.19).
Additional weakness into ISM data, but bouncing back slightly afterward. 10yr yields are down more than 3bps since the release, but still up 3.6bps on the day at 4.391. MBS now down 6 ticks (.19) instead of 12 ticks (.375) before the data.
Treasuries turning green with 10yr down 0.2 bps at 4.354. MBS down only 3 ticks (.09). Powell speech helping.
Best levels of the day with MBS unchanged and 10yr down half a bp at 4.352.
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