On the approach, today's ISM Services PMI looked like the 2nd biggest report of the week. In practice, bonds only managed a modest rally in response. The measured response wasn't for a lack of motivation in the data itself. It was very rate-friendly (lowest inflation component since mid-2020!). Rather, rates have been treated to two straight days of strong bullish cues (ISM Manufacturing/JOLTS) and may simply be losing their appetite for additional gains given the unknowns presented by Friday's jobs report and next week's CPI.
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- ADP Employment
- 145k vs 200k f'cast, 261k prev
- ADP Employment
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- ISM Non Manufacturing
- 51.2 vs 54.5 f'cast, 55.1 prev
- prices: 59.5 vs 65.6 prev
- employment: 51.3 vs 54.0 prev
- ISM Non Manufacturing
Bonds rallying after ADP data. MBS up 3 ticks (.09), but probably closer to 6 ticks (.19) if trading was more liquid. 10yr down 3.4bps at 3.305.
More gains after ISM Services data. MBS up an eighth and 10yr yields down 4bps at 3.3%. Both were briefly even stronger
Holding moderate gains with 10yr down 5bps at 3.29 and MBS up 6 ticks (.19).
10yr yields at the highest levels in several hours, but still down nearly 4bps on the day at 3.301. MBS up 3 ticks (.09) officially, but would likely be another 2-3 ticks higher with liquidity.
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