MBS RECAP: Every Bit the NFP Reaction We Expected

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Posted To: MBS Commentary

When it comes to bond markets reacting to economic data these days, don't expect too much and you won't be disappointed. Heading into today's NFP release, it didn't make much sense to expect a major reaction, although there always tends to be more active trading in the few hours following the data. That turned out to be exactly the case today. Bonds began domestic hours in slightly weaker territory–largely as a carryover from yesterday afternoon's weak momentum. That's not an analytical cop-out as much as it's a comment on the absence of motivation in the overnight session and the gradual, thinly-traded nature of the weakness (i.e. move toward higher rates). NFP came out with a stronger payroll count but with weaker wage growth. Even in a month where it would be…(read more)

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