Have We Mentioned The Jobs Report?

It seems that there's been more build-up than normal ahead of this month's iteration of the Employment Situation (aka the "jobs report").  Is that justified?  Relative to the past year's worth, yes.  In other words, it deserves more hype than the last one, but it's impossible to know how much hype until we see how markets react.  Either way, this will be a common theme in the months ahead as traders try to pin down the post-covid economy.  As for today, bonds moved to the sidelines--selling off a bit but still very central/sideways in the bigger-picture.

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • ADP Payrolls 978k vs 650k, 654k prev

  • Jobless Claims 385k vs 390k f'cast, 444k prev

  • ISM Non-Manufacturing 64.0 vs 63.0 f'cast, 62.7 prev

Market Movement Recap
08:34 AM

Slightly weaker during European trading hours, but back to unchanged before ADP data. Stronger ADP pushed yields higher and stronger Jobless Claims aren't helping. 10yr up 2.1 bps to 1.61. UMBS 2.5 coupons are down 2 ticks (0.06).

10:04 AM

Moderate weakness at the 9:30am NYSE open with 10yr yields up a total of 2.4bps on the day at 1.613%.  That allowed bonds to hold firm in the face of a stronger ISM Services print.  MBS unchanged from last update.

10:50 AM

yields pushing into highest levels of the day with 10yr up 3+bps at 1.62%.  MBS are down just over an eighth of a point on the day, and about an eighth from the morning's high price plateau.

02:18 PM

Stabilizing at the highs as we work through the PM hours.  10yr at 1.625 and MBS down .16 in 2.5 coupons and .22 in 2.0 coupons.

03:44 PM

MBS underperforming with 2.0 coupons down a quarter of a point on the day.  Negative reprices in play from most lenders.  More Fed talk from Kaplan calling MBS purchases into question.