How Big Could Friday's Jobs Report Be?

Thursday ended up being a very calm day relative to most of the recent context.  MBS lost an eighth and 10yr yields moved up a few bps, but both are still right in line with their best levels in months.  There were no stand-out market movers and no notable pops in one direction or the other.  With that, our fate is in the hands of the Bureau of Labor Statistics, as is so often the case.  We're not going too far out on an analytical limb in saying a big miss or beat would likely have the logical impact on rates.  But what are the stakes? The report would have to be truly awful for a realistic challenge of the 4.0% level in 10yr yields and truly stellar in order to facilitate a similarly large move in the other direction.  Reality is more likely to fall somewhere in between, but keep in mind that the AVERAGE beat/miss is roughly 50k and 100k respectively, so anything's possible.

Econ Data / Events
    • Jobless Claims
      • 220k vs 222k
    • Continued Claims
      • 1861k vs 1910k f'cast, 1925k prev
Market Movement Recap
08:38 AM

Modest additional selling after Claims. 10yr yields are up 6bps at 4.174 and MBS are down 10 ticks (.31).

12:06 PM

Decent recovery in AM hours.  10yr up only 1.2bps at 4.125.  MBS down an eighth.

04:32 PM

Modest weakness into the PM hours.  10yr up 2.9bps at 4.148.  MBS down 3 ticks (0.09). 

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