Today's ISM Manufacturing data played the role of coalmine canary today, and although it's not the most vigorous canary anyone's ever seen, it also wasn't dead. That wasn't good for bonds today as ISM is viewed as a good early indicator at times when the market is waiting for a certain shoe to drop (in this case, tariff/policy/uncertainty impact on econ data). ISM is also often heavily traded due to its proximity to the big jobs report (in this case, the following morning). If nothing else, the market's willingness to react to economic data once again is fully confirmed.
MBS up just over an eighth and 10yr yields are down 3.5bps at 4.126 after claims data.
10:23 AM
weaker after ISM. MBS down 2 ticks (.06) and 10yr up 3.6bps at 4.196
12:27 PM
MBS now down 6 ticks (.19) and 10yr up 6.7 bps at 4.227.
02:30 PM
MBS now down a quarter point and 10yr up 7.7bps at 4.238
Lock / Float Considerations
Bonds remain receptive to any major fiscal developments or tariff/trade updates, but those concerns are rapidly passing the spotlight back to big-ticket economic data. In other words, data didn't matter for a bit, but now it does again. That's an important realization with the jobs report on deck. Rates are still near the lowest levels in almost 3 weeks and Friday's data carries significant volatility potential. Floating here is only for bigtime gamblers or clients that want to bet that prices stay low and the economy will progressively worsen.
