Super Sideways After Solid Gains, But Nothing Matters Until Thursday

Super Sideways After Solid Gains, But Nothing Matters Until Thursday


Tue, Nov 8 2022, 4:19 PM

Today’s news cycle was dominated by political commentary.  While this probably matters to the market to some extent and in some unforeseen way, it’s not the same sort of pivotal event as, say, a presidential election (and even those are hit and miss when it comes to big market reactions).  None of that prevented pundits from weighing in on likely outcomes (discussed in more detail in today’s video).  Bonds had one big push of buying momentum just after the 9:30am NYSE open (but potentially linked to headlines regarding European bond issuance estimates).  Momentum leveled off and drifted sideways at stronger levels for the remainder of the day.  Even if there were more lead changes and bigger swings, it would all pale in comparison to the potential volatility surrounding Thursday morning’s CPI data.  Have we mentioned Thursday morning’s CPI data?!  It’s important…

    • Nonfarm Payrolls
      • 261k vs 200k f’cast
      • last month revised to 315k from 263k
    • Unemployment Rate
      • 3.7 vs 3.6 f’cast, 3.5 prev
    • Earnings
    • Labor Force Participation Rate

08:44 AM

Initially slightly weaker overnight, then rebounding during European hours with additional gains in early domestic trading.  10yr down 3.3bps at 4.184 and MBS up 5 ticks (.16)

11:31 AM

Additional gains for MBS and Treasuries with investors piling into both sides of the market.  MBS up almost half a point.  10yr down 7.7bps to 4.142.  Stocks up 1.2% (S&P). 

02:05 PM

Flat and stable near the day’s best levels.  No change in MBS from previous update.  10yr now down 8bps at 4.138.  Stocks have given up almost all the gains.

04:16 PM

Still no major change in trading levels from the previous update.  10yr was as low as 4.12 at the 3pm CME close, but is now back up to 4.142.


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