This morning's Employment Situation data was much weaker than expected.  Even if we give the weather some credit for throwing the numbers off--which is a matter of debate--it was still quite a bit weaker than expected.  As such, bond markets are justifiably in stronger territory than before the data, but to some, it may seem like the rally is more tepid than it should be. 

This morning's first alert touched on potential reasons for that:

"If there's any saving grace for this data, it's the current private payrolls headline which showed 142k jobs created vs a 185k forecast.  If we're to accept that the weather had as much of an impact as some have suggested, this would actually mean today's report is fairly close to consensus. As such, if we see bond markets make no further progress than their initial jolt into positive territory, this might be why.  In other words, the mere POSSIBILITY that weather can explain away some of the gap means there's a chance this isn't weak enough for us to see any further progress."

After bouncing almost all the way back to unchanged territory, Treasuries have resumed the rally, but cautiously so.  The day-over-day improvement is just 3.8bps at the moment.  MBS have been a bit more convicted in their positivity today, but Monday's levels remain elusive.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
97-09 : +0-13
FNMA 3.5
101-19 : +0-13
FNMA 4.0
104-31 : +0-10
Treasuries
2 YR
0.3074 : -0.0196
10 YR
2.6674 : -0.0346
30 YR
3.6537 : -0.0213
Pricing as of 2/7/14 11:44AMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:49AM  :  Pondering Bond Markets Surprising Lack of Follow-Through on Weak NFP
8:42AM  :  NFP Much Weaker Than Expected, Bond Markets Rallying, But Thinking About Weather (maybe)
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS - FED'S FISHER SAYS JOBS DATA WILL BE SIGNIFICANTLY AFFECTED BY WEATHER, MUST TAKE THAT INTO ACCOUNT"
Matthew Graham  :  "RTRS- U.S. JAN NONFARM PAYROLLS +113,000 (CONSENSUS +185,000) VS DEC +75,000 (PREV +74,000), NOV +274,000 (PREV +241,000)"
Matthew Graham  :  "RTRS- US JAN PRIVATE SECTOR JOBS +142,000 (CONS +185,000), DEC +89,000 (PREV +87,000)"
Matthew Graham  :  "minimal revisions to boot"
Christopher Stevens  :  "1k revis in DEC nice"
Matthew Graham  :  "RTRS - U.S. JAN JOBLESS RATE 6.6 PCT, LOWEST SINCE OCT 2008 (CONSENSUS 6.7 PCT) VS DEC 6.7 PCT (PREV 6.7 PCT)"
Matthew Graham  :  "RTRS- U.S. LABOR FORCE PARTICIPATION RATE 63.0 PCT IN JAN VS 62.8 PCT IN DEC"
Scott Valins  :  "any surprise 10 year only dropped 6bps? I know it's still early."
Brent Borcherding  :  "Bad number was largely built in. Most have been planning on blaming weather for some time."
John Tassios  :  "it will drop more SV as the day goes on"
blarney27  :  "I think the stock lever may kick in after an early morning pop."
Raymond John Ruddy III  :  "200 day moving average bounce again?"
blarney27  :  "Many people cited the warm week in which the survey was taken so any weather excuses are absurd. The fact is data and earnings stink and stocks are way overvalued. The longer this charade goes on the bigger the pop when it all comes to an end. Like others saying before me; bond yields will be much lower this year."
Matthew Graham  :  "Edgar, that would work if all employment needs were met on-demand, or "just-in-time." I really do think the weather can have SOME distorting effect here. I don't think it's much, but maybe enough to temper the negativity with which this result would otherwise be viewed. Maybe enough to say it's not inconclusively bad enough to throw in the economic towel."
Victor Burek  :  "i agree mg, gonna take more bad data for us to move lower, this report was not enough"
Scott Valins  :  "well said MG - don't think we can completely throw out weather effect until we see a few more months"
Andy Pada, Jr.  :  "Are Feb. jobs numbers traditionally bad? Fewer work days?"
Matthew Graham  :  "No effect there AP. The NFP figure is based on the question to companies: "how many people on payrolls that received pay any time in the period that includes the 12th of the month?" Not exact words, but similar"
Matthew Carver  :  "futures reversed gains, hopefully stock lever adds more support "
John Tassios  :  "morning rate sheets will be conservative until lenders figure out what bonds will do due to volatility today "
Jeff Kalb  :  "Interesting reversal taking place...MG any explanation?"
Matthew Graham  :  ""If there's any saving grace for this data, it's the current private payrolls headline which showed 142k jobs created vs a 185k forecast. If we're to accept that the weather had as much of an impact as some have suggested, this would actually mean today's report is fairly close to consensus. As such, if we see bond markets make no further progress than their initial jolt into positive territory, this might be why. In other words, the mere POSSIBILITY that weather can explain away some of the gap means there's a chance this isn't weak enough for us to see any further progress""
Hugh W. Page  :  "I'm going with that explanation . . ."
Jeff Kalb  :  "MG, you make it easy, thx"