MBS Day Ahead: A Very Important NFP Report

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Posted To: MBS Commentary

On Wednesday, bond markets digested two of the week's most important economic reports in the from of ADP employment and ISM non-manufacturing. Appointments of new central bankers in the US and Europe provided a modestly positive backdrop while the econ data helped the gains extend. The net effect was a move to new long-term lows for 10yr yields (lowest since Nov 2016). MBS prices made it to new highs since Sep 2017 and are almost back to the Nov 2016 levels. In the day ahead, to say "all eyes are on NFP" would be an understatement, and perhaps an overstatement. It's an understatement because this is an incredibly important report due to its ability to confirm or reject the negative implications in last month's NFP (which came in at a measly 75k). The labor market has been…(read more)

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