MBS RECAP: Another Weak ISM Report Raises The Stakes

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Posted To: MBS Commentary

Today's ISM services data (technically "non-manufacturing") was one of the week's two biggest reports apart from tomorrow's jobs data. Like it's manufacturing-specific sibling, it came out much weaker than expected, and markets did what you'd expect. Bonds quickly improved to the week's best levels. MBS struggled to keep pace with Treasuries. And stocks sold-off initially but ultimately reversed course as investors assumed the data implied better odds for more Fed rate cuts. That's about as simple as today can be explained, and there's no need to make it any more complicated. The bigger questions surround tomorrow's jobs report. With labor markets as strong as they have been, does a strong NFP number do much damage to this week's rally? With…(read more)

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