ISM Makes For Negative NFP Lead-Off

If the bond market has to digest an ISM Services report that is much stronger than expected, it would be best not to have it come out less than 24 hours before the big jobs report.  Otherwise, you get a day like today where the data fueled a pre-NFP (nonfarm payrolls--the headline component of Friday's jobs report) lead off toward higher rates.  

Econ Data / Events
    • Jobless Claims
      • 225k vs 220k f'cast, 219k prev
    • S&P Services PMI
      • 55.2 vs 55.4 f'cast, 55.7 prev
    • ISM Services
      • 54.9 vs 51.7 f'cast, 51.5 prev
    • ISM Employment
      • 48.1 vs 50.2 prev
    • ISM Prices
      • 59.4 vs 56.3 f'cast, 57.3 prev
    • ISM Activity
      • 59.9 vs 53.3 prev
Market Movement Recap
08:34 AM

Weaker overnight and no major reaction to Jobless Claims.  MBS down 3 ticks (.09) and 10yr up 2.6bps at 3.81

10:05 AM

Weaker after ISM. 10yr yields are now up 5bps at 3.833 and MBS are down another 3 ticks (.09) for a total of 6 ticks (.19) on the day. 

03:16 PM

pre-NFP drift toward weaker levels.  MBS down 9 ticks (.28) and 10yr up 6.3bps at 3.846

05:13 PM

bonds closed near weakest levels, and right in line with the previous update.