While the headline for non-farm workers (850k vs. 700k f’cast) may seem at first glance to be cause for concern, the bond market is digesting it well today. Internal components could help offset the headline (unemployment up 0.2%, weekly working hours down 0.2 hours, wages down 0.1 and revised down 0.1 for the last month). Bonds traded “unchanged” on both sides according to payroll. It could stay that way during the day. Even if yields return to their AM highs of 1.46%, it would still be a strong performance in the face of a strong NFP headline.
Right now they’re spending more time on something STRONGER, if you can believe that. Equities are also stronger, which adds to the belief that markets see this release of job data as “not enough” to force the Fed to accelerate its base rate hike prospect.
Now for the challenge of the day, see if you can tell when the NFP impacts from the reaction of stocks, bonds, and bond volumes. Subtle, isn’t it?
MBS pricing overview
The price shown below is delayed, please refer to the timestamp below. Real-time prices is available through MBS Live.
101-05: + 0-05
|Prices from 07/02/21 9:03 a.m.|
Tomorrow’s economic calendar