Aren’t Bonds Overreacting to a Jobs Report That Wasn’t Supposed to Matter?

MBS Live Recap: Aren’t Bonds Overreacting to a Jobs Report That Wasn’t Supposed to Matter?


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Fri, Feb 4 2022, 5:01 PM

The Fed already declared victory on the “full employment” portion of their mandate and justified recent hawkishness as a function of inflation concerns.  The analytical community was crowded with opinions about today’s jobs report not being a market mover due to any new information on the labor market.  After all, Omicron was destined to distort the numbers anyway, so why should anyone care?  Turns out they did care… a lot!

  • Fed MBS Buying 10am, 11:30am, 1pm

  • Nonfarm Payrolls ……………..467k vs 150k f’cast
    Previous NFP revised up to…. 510k from 199k
    Unemployment rate ………….4.0 vs 3.9 f’cast, 3.9 prev
    Participation rate ……………..62.2 vs 61.9 prev
    wages …………………………..0.7 vs 0.5 f’cast, 0.6 prev

08:51 AM

Massively weaker after stunningly strong NFP.  10yr up 6bps to 1.896 and 3.0 UMBS down 3/8ths of a point.

11:20 AM

Weakness continued into the 11am hour with MBS losing another eighth of a point and the 10yr now up 9bps to 1.927. 

03:20 PM

Not much volatility since the opening sell-off.  In line with the weakest levels of the day with MBS down half a point and 10yr yields up almost 10bps at 1.932.


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