MBS RECAP: Paradoxical NFP Rally Undone By Fed-Speak

Posted To: MBS Commentary

Nonfarm payrolls came in at 227k vs a median forecast of 175k. This fact, in and of itself, would almost always be grounds for bond market weakness, but that wasn’t the case today. Mitigating factors abound: 1. The 175k forecast was obviously a bit light considering it didn’t change in response to Wednesday’s balmy ADP employment data and the strong ISM Manufacturing employment index. In other words, markets were probably prepared for 200k+ 2. There was no significant revision to last month’s reading of 156k (revised to 157k), which is on the lighter side of the recent range. 3. Unemployment ticked higher (up to 4.8 vs 4.7). While traders don’t tend to care about unemployment nearly as much as local evening news anchors, it helped offset the headline nonetheless. 4. The…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed