10yr yields are now decisively below the levels seen BEFORE the last CPI report (the one that caused a jump from the 4.1's to the 4.3's). This has been accomplished without any shockingly downbeat econ data, and without the market ramping up bets on a friendlier rate trajectory from the Fed. In other words, it's some combination of supply/demand technicals (Treasury auction composition and Fed QT tapering effects) and, more importantly, a legitimate belief that economy is not at risk of reigniting inflation concerns. On that note, Friday's jobs report is in a position to undo much of the recent improvement if it makes a strong counterargument. The recent data and the bond market response are essentially daring the jobs report to surge.
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- Jobless Claims
- 217k vs 215k f'cast, 217k prev
- Continued Claims
- 1906k vs 1889k f'cast, 1898k prev
- Jobless Claims
Stronger on data and ECB announcement. 10yr down 3.9bps at 4.069. MBS up 5 ticks (.16) before accounting for roughly 2 ticks (.06) of illiquidity.
Gains erased in moderate, steady volume, and before Powell testimony. MBS up only 2 ticks (.06) and 10yr unchanged at 4.108.
Weakest levels just before 1pm and holding modest gains since then. 10yr down half a bp at 4.104. MBS up 3 ticks (.09).
Near best levels in MBS, up an eighth of a point. 10yr down 1.6bps at 4.092. Shorter-term Treasuries are doing even better.
MBS Market Alerts
