MBS Live Day Ahead: Bipolar NFP = Bipolar Market Reaction

The day is young, but off to an uncommonly volatile start following 2 key inputs.  The overnight session brought news of the Senate passing the $1.9 trillion spending bill.  Bond yields surged higher as a result.  The second input was the big miss in the jobs report (combined with the big beat in the unemployment rate).  The initial reaction was strongly positive, but it has since reversed course (and then reversed again, and then again one more time). 

All of the bond market volatility is playing out in a vacuum that almost completely ignores the stock market.  If you ever wondered whether or not NFP deserves the title of the most consequential economic report for the bond market, days like today make it clear.