Why Bonds Sold Off Despite Weaker Jobs Report

First off, read the AM commentary if you haven't already. This recap doesn't add much to that (but the video adds a lot). Bottom line, NFP was weaker, but that was the worst of the news. The unrounded unemployment rate barely budged and it would have moved LOWER (under 4.00%) were it not for the uptick in labor force participation. Higher oil prices contributed a bit to intraday weakness as did a recovery in French credit spreads. At the end of the day, this wasn't the jobs report that sowed any seeds of doubt about cracks showing in the labor market.

Econ Data / Events
    • Average earnings mm (Sep)
      • 0.1% vs 0.3% f'cast, 0.3% prev
    • Non Farm Payrolls (Sep)
      • 29K vs 90K f'cast, 162K prev
    • Participation Rate (Sep)
      • 61.8% vs -- f'cast, 61.6% prev
    • Unemployment rate mm (Sep)
      • 4.2% vs 4.1% f'cast, 4.1% prev
Market Movement Recap
10:06 AM

Initially much stronger after NFP, but dialing back a bit. MBS up a quarter point and 10yr down 4.1bps at 4.198

02:31 PM

MBS now down a quarter point and 10yr up 4bps at 5.28. Cooler heads prevail on jobs report reaction and EU credit spreads