Surprisingly Calm and Logical Rally

Today's economic data came in either flat or noticeably weaker depending on the report.  Bonds rallied as a result. This is a logical outcome, and logical outcomes seem like the exception to the rule lately.  That said, keep in mind that part of our baseline for the current rising rate trend is to see short term pull-backs every 3-4 days.  This fits the bill.  Being able to use data as an excuse makes it a no-brainer.  Nothing about the bigger picture has changed.  This week's focus remains on Friday's jobs report.

Econ Data / Events
    • ADP Employment
      • 89k vs 153k f'cast, 177k prev
    • ISM Services
      • 53.6 vs 53.6 f'cast, 54.5 prev
    • ISM Biz Activity
      • 58.8 vs 56.5 f'cast, 57.3 prev
Market Movement Recap
09:07 AM

Initially weaker overnight, then stronger.  More gains after ADP.  10yr down 5.6bps at 4.739.  MBS up 9 ticks (.28).

11:39 AM

Some losses after ISM data, but now back in line with 10am levels. 10yr down 4.7bps at 4.748.  MBS up 7 ticks (.22).

02:33 PM

Decent ground-holding continues.  MBS still up 7 ticks (.22) and 10yr down 5.2bps at 4.743.

04:13 PM

Additional gains, and a modest pull-back in MBS, now up 12 ticks (3/8ths).  10yr down 6.4bps at 4.731.