Stability, But at a Cost; Does NFP Matter Tomorrow?
In terms of intraday volatility, today was arguably the most boring day of the week. There were no major bouts of buying or selling and no clear reactions to any headlines or data. Unfortunately, the stability came at the expense of several more bps of weakness overnight. Yields closed at their highest levels in nearly 2 years, albeit just barely, and MBS lost another 6 ticks (.19). Tomorrow brings December’s jobs report. Today’s recap video discusses the associated market movement potential as well as the volatility seen so far this week.
Econ Data / Events
Fed MBS Buying 10am, 11:30am, 1pm
Jobless Claims 207k vs 197k f’cast, 200k prev
ISM Services 62.0 vs 66.9 f’cast, 69.1 prev
Market Movement Recap
08:36 AM Losses extend overnight, both in Asia and Europe. Big volume. 10yr rose 3bps to 1.73 and 2.5 UMBS down 6 ticks (.19) at 100-30 (100.94).
11:15 AM weaker ISM Services data had zero impact on today’s weaker levels. 10yr up 4bps at 1.74. MBS down nearly a quarter point.
02:18 PM Flat and boring all day (for a change). MBS unchanged from last update. 10yr yield now up only 2.8bps at 1.728. Traders on cruise control.
04:17 PM Bonds stayed flat through the 3bp close with no overt reactions to any news/data and trading levels right in line with the previous update.