Refreshingly Resilient Ahead of Jobs Report

Bonds began the day with a slight boost from Europe’s reaction to the Bank of England announcement (emphasis on “slight”).  Gains faded heading into the 9:30am NYSE open, but bounce back in short order.  Both MBS and Treasuries remained sideways in modestly stronger territory since then.  In so doing, yields opted to remain below the 2.71% pivot point that had offered resistance on several occasions since being broken as a ceiling on Tuesday.  This is a resilient showing ahead of Friday’s big jobs report, and not one that suggests too much exuberance.  Simply put, bonds look ready to digest (and react to) any major message about the economy in the jobs data.

Econ Data / Events

Jobless Claims

260k vs 259k f’cast

Continued Claims

1.416m vs 1.370m f’cast

Market Movement Recap

09:51 AM Stronger in the late overnight session after the Bank of England announcement.  No major impact from data at 8:30.  Selling pressure into the 9am hour but finding footing now with Treasuries and MBS holding onto modest gains.

02:40 PM Best levels of the day just after the noon hour.  Slight selling since then, but still in positive territory.  10yr down 2bps at 2.687.  MBS up 3 ticks (.09) at 100-12 (100.375).

04:28 PM Late weakness starting around 4:15pm–a time of day that suggests tradeflow momentum (as might be seen during corporate bond pricings).  MBS are still 2 ticks higher on the day (+0.06) and 10yr yields are still down 1.8bps at 2.687.