This morning's Jobless Claims report was the week's most relevant economic report apart from the S&P PMI data that came out just over an hour later. As it happened, Claims garnered the only obvious response, pushing yields slightly higher in addition to the modest weakness seen in the overnight session. Bonds were able to push back in a friendlier direction at the 9:30am NYSE open--something they've done on 3 out of 4 days this week. It wasn't quite enough to turn a red day green, but with MBS ending down only 2 ticks (.06), some might say it was close enough for government work.
Some selling before and after jobless claims. MBS down 7 ticks (.23) and 10yr up 5.3bps at 4.438
10:09 AM
decent recovery at 9:30am NYSE open and no major reaction to S&P PMI data. MBS down an eighth and 10yr up 2.7bps at 4.411
01:01 PM
MBS down only 2 ticks (.06) and 10yr up 1.9bps at 4.403
03:39 PM
Fading a bit now. MBS down 5 ticks (.16) and 10yr up 3.3bps at 4.417
Lock / Float Considerations
After 2 days of selling, bonds increasingly look like they're settling into a narrow, inconsequential range trade ahead of the upcoming week that's chock full of big ticket events and potential market movers. From a lock/float risk/reward standpoint, that's really when things get interesting.
