Bonds Give Up AM Gains After Powell Speech

Bonds made it through the jobs report in good shape with modest gains intact heading into the PM hours. Things changed after that, with the most obvious turning point coinciding with Fed Chair Powell’s speech.  If traders had been hoping to hear Powell express some concern over economic momentum, they were disappointed when he said “the economy is fine. It doesn’t need us to do anything, really.” With that, bonds moved into negative territory and Fed Funds Futures moved back near the week’s weakest levels (indicating slightly lower odds of the next rate cut happening in May). 

Econ Data / Events

Nonfarm Payrolls

151k vs 160k f’cast, 125k prev

Unemployment Rate

4.1 vs 4.0 f’cast, 4.0 prev
unrounded: 4.1396%

Participation Rate

62.4 vs 62.6 f’cast

Market Movement Recap

08:56 AM slightly stronger to start with additional gains after NFP.  MBS up almost a quarter point and 10yr down 5.2bps at 4.218

01:49 PM swooning now after consolidating into the noon hour.  MBS down 3 ticks (.09) and 10yr up 3.5bps at 4.306

03:49 PM Slightly weaker and now holding mostly sideways.  MBS down 5 ticks (.16) and 10yr up 4.5bps at 4.316