MBS MID-DAY: Strong NFP and Bond Markets Not Much Weaker; What Gives?!

By: Matthew Graham •

NFP came out much stronger than expected with solid revisions to the past two reports, and a drop to 5.9% on the unemployment rate.  With revisions, this report adds 317k jobs.  Historically, this would have tanked the bond market, but MBS are currently down only an eighth and 10yr yields are up 2bps at 2.456.  What gives?

If you didn't read it already, read this: Interesting Times on NFP Friday.

That's my analysis of "what gives."  Bond markets don't much care about economic data right now.  Nothing more to say really.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
99-02 : -0-06
FNMA 3.5
102-18 : -0-05
FNMA 4.0
105-22 : -0-04
Treasuries
2 YR
0.5750 : +0.0390
10 YR
2.4570 : +0.0210
30 YR
3.1470 : -0.0010
Pricing as of 10/3/14 12:11PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:25AM  :  Solid Bounce for Bonds; Reprice Risk Evaporates
10:29AM  :  ALERT ISSUED: Negative Reprice Risk on the Horizon; MBS hit Lows
8:54AM  :  First Move is Weaker Following NFP, but Already Having Second Thoughts
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Charles Cybulski  :  "Absolutely love this site! Seeing this event "live" is a lot of fun. Newbie here. Thank you"
Hugh W. Page  :  "I think markets just see this as a continuing trend with nothing to scream about. U6 still near 12%, LPFR still low, Emp to Pop ratio still at abnormally low levels. Part timers wanting full time still high."
Matthew Graham  :  "Not until 2014 (http://mndne.ws/1vzP0aV)"
aaron meyer  :  "Yeah that's not normal"
Matthew Graham  :  "as HP points out, a +317k swing and 10's are 3bps higher. Think about what a 317k swing used to do to bond markets "
Hugh W. Page  :  "317K jobs with revisions"
Matthew Graham  :  "I don't think this say anything at all about how today goes"
Brent Borcherding  :  "Knee Jerk. Big forces than NFP at play for rates, currently."
Matthew Graham  :  "we'll see"
Oliver Orlicki  :  "going to be an ugly day"
Matthew Graham  :  "RTRS- U.S. SEPT JOBLESS RATE 5.9 PCT, LOWEST SINCE JULY 2008 (CONSENSUS 6.1 PCT) VS AUG 6.1 PCT (PREV 6.1 PCT)"
Matthew Graham  :  "RTRS- U.S. SEPT NONFARM PAYROLLS +248,000 (CONSENSUS +215,000) VS AUG +180,000 (PREV +142,000), JULY 243,000 (PREV +212,000)"
Christopher Stevens  :  "Fed to possibly change language. http://mndne.ws/1vzNgym"