MBS Day Ahead: Markets Asking Big Questions

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Posted To: MBS Commentary

In the day just passed, the bond market rallied impressively following an exceptionally weak ISM services report. That was the 2nd of the two ISM purchasing managers' indices this week and both were more than merely "slightly off the mark." The numbers were low enough to ramp up the market's fears of an impending recession, or whatever you call the initial slide toward a recession where the bulk of the drama in markets occurs. In the day ahead markets will ask themselves two things. First, they'll ask how today's jobs report fits in the narrative of recession concern. Labor markets have been a bastion of hope, along with a consumer that continues to be resilient. Visible cracks in the jobs market could have dire implications. It seems that stocks are worried about…(read more)

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