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Bond Market Resilience Suggests More Focus on CPI
Up until the 3pm CME close, the bond market was having a surprisingly resilient day relative to the market moving data. When NFP beats forecasts by 100k (today: 303k vs 200k f'cast), we tend to see big losses. It was no surprise to see losses, but possibly surprising to see bonds almost back to pre-NFP levels 2 hours later. Even after the 3pm sell-off, MBS are still in line with yesterday morning's levels. That's better than we'd expect, based on the data and one of the only conclusions is that the market is more anxious to see next week's CPI on Wednesday.
Econ Data / Events
Nonfarm Payrolls
303k vs 200k f'cast, 270k prev
Unemployment Rate
3.8 vs 3.9 f'cast, 3.9 prev
Earnings
0.3 vs 0.3 f'cast, 0.2 prev (revised up 0.1)
Market Movement Recap
09:36 AM Pretty stable after initial losses. MBS down 7 ticks (.23) and 10yr up 6.5bps at 4.377.
10:55 AM Decent recovery, but it's not continuing for now. MBS down only 5 ticks (.16). 10yr up 5.5bps at 4.369 (briefly made it down to 4.337.
02:28 PM Fairly flat in the PM. MBS down 6 ticks (.19). 10yr up 6bps at 4.372.
03:17 PM Weakness at 3pm CME close. MBS down 10 ticks (.31) and 10yr up almost 8bps at 4.391.
MBS Commentary
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Bond Market Resilience Suggests More Focus on CPI
Up until the 3pm CME close, the bond market was having a surprisingly resilient day relative to the market moving data. When NFP beats forecasts by 100k... (read more)
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Mortgage Rate Watch
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Data dependent... That's a phrase that is all too prevalent in financial markets and among members of the Federal Reserve. It refers to the fact that economic data will guide the future path of interest rate decisions. While rates ... (read more)
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Rob Chrisman
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I head to Central Texas today (A53 on Southwest; something about maybe seeing an eclipse); statewide Texas home ownership rate is about 64 percent. This is a shade lower than the 66 percent nationwide. (Home ownership & operational challenges fac... (read more)
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