Record-Breaking Job Gains, But Bonds Ultimately Improve
Last month's jobs report shattered records, both for the outright level of job creation and for the gap between job growth and forecasts. While today's job count was even bigger (+4.8 million versus 2.699m last month), it wasn't as far above the forecast consensus (1.8m gap versus 10.5m last month). But even that doesn't fully explain why bonds were able to get back to stronger levels a few hours later. Waiting on covid news!
11:30-11:50 AM (ET) - Fed 30yr UMBS Buying
Nonfarm Payrolls 4.8m vs 3.0m f'cast, 2.699m prev
Unemployment rate 11.1 vs 12.3 f'cast, 13.3 prev
Jobless Claims 1.427m vs 1.355m f'cast, 1.482m prev
Bonds broadly unchanged overnight despite mild-mannered rally in stocks. 10yr yields starting the day up 0.3bps at .679 and UMBS 2.0 coupons are up 1 tick (0.03) at 102-10 (102.31)
Most of the losses in Treasuries have been erased with 10s back down to .686 (up 1bp on the day). MBS are still outperforming and are currently at the highs of the day up 3 ticks (.09) at 102-12 (102.375).