MBS RECAP: The Fairly Logical Story Behind Today’s Rates/Jobs Paradox


Posted To: MBS Commentary

The Employment Situation (aka the jobs report, or simply, "NFP") is the granddaddy of all economic reports. Through the years, no other piece of data has mattered more to bond markets or had a bigger effect on average. With near-clockwork-like regularity, big beats push rates higher and big misses push rates lower. So why in the world did today's HUGE miss cause rates to spike to the highest levels in months this morning?! The most obvious answer is that the payroll counts are being disregarded due to the weather effects. Simply put, employers didn't add nearly as many jobs as expected because many parts of the country had more pressing matters to deal with thanks to Harvey and Irma. But that alone wasn't enough to explain today's early rate spike. It's only when…(read more)

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