Earl Data-Driven Rally And Not Much Drama After That

Despite a slew of other economic data that was stronger than expected in the 8:30am time slot, the bond market was perfectly content to focus on yet another instance of the highest jobless claims since 2021.  As far as we're concerned, that's the highest claims number since 2017 considering 2021 was still on the way down from the post-covid stratosphere. As far as the market is concerned, that's a potential early indication of a shift in the labor market--something that could help solidify a downward trend in inflation.  Traders saw it that way, at least, as bond rallied sharply after the data and didn't move too much after 10am except for a brief correction heading into the EU close.  MBS made a bigger deal of that than Treasuries due to illiquidity. 

Econ Data / Events
    • Jobless Claims
      • 262k vs 249k f'cast, 261k prev
    • Retail Sales
      • 0.3 vs -0.1 f'cast, 0.4 prev
    • Philly Fed
      • -13.7 vs -14 f'cast, -10.4 prev
    • Import Prices
      • -0.6 vs -0.5 f'cast, 0.4 prev
    • NY Fed Manufacturing
      • 6.6 vs -15.1 f'cast, -31.8 prev
Market Movement Recap
08:35 AM

Modestly weaker overnight with little spillover from Europe and the ECB announcement.  10yr up 1.6bps at 3.806.  MBS down just over a quarter point.

11:22 AM

Steady gains into 1040am but losing ground since then.  MBS down about 6 ticks from the highs (.19), but still up 3 ticks (0.09) on the day).  10yr yields down 4bps on the day at 3.75, but up from lows of 3.707.

12:15 PM

Bouncing back toward stronger levels.  MBS up a quarter point.  10yr down 5.6bps at 3.734

02:47 PM

Holding gains with both MBS and Treasuries still in line with levels from the last update.