Econ Data Causing Bonds to Reconsider Commitment to Super Low Yields

Bonds haven't been interested in econ data because none of it has had the ability to tell much of a story.  Today's ADP Employment report is arguably an exception as it was staggeringly stronger than expected.  Other data surprised to the upside, stocks set more multi-month highs, and bonds suddenly find themselves on the run. 

Econ Data / Events

  • 11:30-11:50 AM (ET) - Fed 30yr UMBS Buying  

  • ADP Employment: -2.760m vs -9.000m f'cast, -19.557m prev

  • ISM Non-Manufacturing 45.4 vs 44.0 f'cast, 41.8 previously

  • Factory Orders -13.0 vs -14.0 f'cast

Market Movement Recap
08:35 AM

Bonds were modestly weaker overnight and are now under additional pressure after the much stronger-than-expected ADP Employment Report.  10yr yields up nearly 3bps, but MBS outperforming for now, down only 2 ticks (0.06).

10:08 AM

Additional losses after the 10am econ data (stronger ISM and factory orders).  MBS down a quarter point and 10yr yields up and over the important 0.74% technical ceiling.

12:01 PM

Potentially seeing some support now, but only after things got pretty panicky there for a bit.  10yr yields remain over .74 (they were as high as .771).  2.0 UMBS are now down only a quarter point, but had been down nearly half a point at the lows of the morning.  

02:04 PM

Bonds haven't hit any weaker levels compared to the 10-11am hour, but they've been unable to rebound in any convincing way.  2.0 MBS are still more than a quarter point off and 10yr yields are up 7.4bps at .761.