Today's NFP data was exactly what we needed to let us know what has been going on so far in 2016. It was so strong that it left no doubt as to how neutrally positioned markets would have traded it. For you smart kids in the crowd who'd like to point out that wage growth missed its forecast, I'm sure we can all agree that there's never been a wage growth miss of 0.2 percent that's overshadowed a 92k payroll beat.
Bottom line, neutral markets would have sold bonds and bought stocks on today's report. The fact that they didn't tells us that they're not neutrally positioned (shocker!). We can probably conclude that this sense of global economic panic is the driving force right now, but can't completely rule out that it's been exacerbated by the traditional 'old-year/new-year' tradeflow repositioning. As such, next week could be a bumpy ride, even if the global panic story ultimately ends up pushing rates lower still.
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 3.0 100-29 : +0-00 | FNMA 3.5 103-29 : +0-01 | FNMA 4.0 106-12 : +0-00 |
| Treasuries | 2 YR 0.9360 : +-0.0200 | 10 YR 2.1160 : +-0.0370 | 30 YR 2.9090 : +-0.0170 |
| Pricing as of 1/8/16 6:53PMEST |
Today's Reprice Alerts and Updates
10:17AM : Bond Markets Turn Green!
8:32AM : ALERT ISSUED: Jobs Report Much Stronger, Bonds Selling-Off
MBS Live Chat Highlights
Sung Kim : "today seems like a good day to lock anyway, even though i dont advocate Friday locks with green. stock bounce back could wipe this all away in a day"
Matthew Graham : "there may or may not be a newsletter coming out in a little bit that you can slap your name on and email/tweet/fb/linkin to all your clients and biz partners with that very piece of analysis, as well as some aesthetically pleasing charts and formatting---all for the low low price of FREE."
Matthew Graham : "JH, you could also just think of the Fed taking the punchbowl away at the same time that Chinese market manipulation and latent economic malaise is coming to a head, and the resulting flight of capital needing some place to go (and finding its way into bond markets)."
Victor Burek : "and to expand on chip's comment, global mess means flight to quality..USA...makes dollar stronger, ...."
Chip Harris : "It's not the Fed, it's the global economic mess"
Victor Burek : "higher fed rate makes dollar stronger...stronger dollar ,everything you buy is cheaper..cheaper means deflation..rates follow inflation/deflation"
Justin Harward : "I don't quite understand the correlation between the Fed hiking rates = lower mortgage rates. (Does anyone?)"
Justin Harward : "Indeed. This morning I told my wife "Oh great, NFP came in 92k higher... and... uhh, we're green!" -- she was just as surprised ;)"
Timothy Baron : "I'm just happy to be at 2.14 on a 292k print NFP day."
Ted Rood : "From what I remember of the 30's, spending was very subdued."
John Tassios : "Also, low oil prices have not translated to increased consumer spending. Consumers using savings to pay down debts and save for rainy day more than spending. Huge psychological shift has occurred post 2008 crisis has greatly reduced aggregate demand from consumers and biz spending. the only other time this has occurred, was after 1929 crash. My 2 cents."
John Tassios : "if anything it may cause imbalances and market disruptions as we have seen in EU, bunds snap selloffs"
Matthew Graham : "no, they've mentioned it a few times"
Andy Pada, Jr. : "wow...is this the first Fed member to discuss the merits of negative interest rates?"
Matthew Graham : "RTRS - WILLIAMS: IT HAS BEEN SURPRISING HOW WELL NEGATIVE INTEREST RATES HAVE WORKED IN OTHER COUNTRIES"
Matthew Graham : "RTRS - WILLIAMS: IN FUTURE, NEGATIVE INTEREST RATES COULD BE A LAST RESORT FOR U.S. BUT WOULD NEED TO STUDY IT"
MBS Market Alerts
