Nice Win For Bonds With Help From Data

There are plenty of moving pieces at the moment when it comes to assigning credit for various ups and downs in the bond market on any given day.  Many of those can only be guessed at–or at the very least, debated–due to the uncertain eventual impact from economic policies that have yet to be fully understood or implemented.  For example, some would say that bonds benefited from yesterday’s news that Trump intends to take over Gaza, but others would say it was a non-event.  One thing all bond watchers can agree on is that pedigree reports like ISM Services are highly likely to do logical things to bonds when they come in noticeably weaker or stronger than expected.  Today’s ISM data was weaker, including the price component.  As such, it’s no surprise to see an extension of the overnight rally just after the data, with the resulting trading levels lasting for most of the day.

Econ Data / Events

ADP Employment

183k vs 150k f’cast, 122k prev

ISM Services

52.8 vs 54.3 f’cast, 54.0 prev

ISM Prices

60.4 vs 64.4 prev

Market Movement Recap

08:27 AM MBS up just over an eighth of a point and 10yr down 5bps at 4.46

10:45 AM Gains continue after ISM data.  MBS up 9 ticks (.28) and 10yr down 8bps at 4.425.

01:08 PM Calmly holding best levels of the day.  MBS up 3/8ths and 10yr down almost 9 bps at 4.419

03:07 PM Down just over an eighth from highs, but still much stronger with MBS up 10 ticks (.31) on the day.  10yr yields down 8.4bps at 4.421