Today's jobs report was much stronger than expected and there were no compelling counterpoints to give traders any second thoughts. As such, traders proceeded logically by dumping bonds. Trading levels hit the 3pm close very close to the levels seen immediately after the jobs report and there wasn't much fanfare in between. All in all, a reaction that was as straightforward as it was unpleasant.
big selling after data. MBNS down half a point. 10yr up 8.9bps at 4.773
10:31 AM
Decent recovery in Treasuries with 10yr yield now up only 4.8bps at 4.734. MBS down 14 ticks (.19).
02:42 PM
MBS as new lows, down nearly 5/8ths. 10yr up 8.1bps at 4.765
Lock / Float Considerations
Strong jobs report reinvigorates the upward trend in rates. The upcoming CPI data can take the pain to the next level or help create some support. In general, this is a lock-biased environment until such time as the data takes a cohesive and decisive turn in a rate-friendly direction. That's not to say there won't be pockets of short-term opportunities, but capitalizing on them would involve luck rather than strategy.
