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Surprisingly Big Bond Rally Relative to The Data
Surprisingly Big Bond Rally Relative to The Data
Bonds went on a bit of a buying spree on Thursday. It was the biggest rally day since November, at least, and that's impressive given the motivations. Specifically, there was a trifecta of downbeat labor market reports (Challenger, Jobless Claims, and Job Openings). Individually, none of these are worth a third of the move we saw today, but the whole was greater than the sum of its parts. There's also a 4th report being traded today: next week's big jobs report. In other words, between yesterday's ISM employment numbers and today's reports, traders are taking a cautious lead-off ahead of the big jobs report. This raises the stakes for volatility next Wednesday morning.
Modestly stronger overnight with additional gains after AM data. MBS up almost an eighth and 10yr down 4bps at 4.24
Additional gains after JOLTS data with 10yr down 5 bps at 4.228 and MBS up 5 ticks (.16).
Best levels of the day. MBS up a quarter point and 10yr down 7.1bps at 4.207
Secret Econ Data Adding to The Rally
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Thursday, Feb 05 | |||||
| 7:30AM | Jan Challenger layoffs (k) | Jan | 108.435K | 35.553K | |
| 8:30AM | Jan/31 Jobless Claims (k) | Jan/31 | 231K | 212K | 209K |
| 8:30AM | Jan/24 Continued Claims (k) | Jan/24 | 1844K | 1850K | 1827K |
| 10:00AM | Dec USA JOLTS Job Openings (ml) | Dec | 6.542M | 7.2M | 7.146M |
| 10:00AM | Dec JOLTs Job Quits (ml) | Dec | 3.204M | 3.161M | |
| 10:50AM | Fed Bostic Speech | ||||
| Friday, Feb 06 | |||||
| 10:00AM | Feb Sentiment: 1y Inflation (%) | Feb | 4% | ||
| 10:00AM | Feb U Mich conditions | Feb | 54.9 | 55.4 | |
| 10:00AM | Feb Sentiment: 5y Inflation (%) | Feb | 3.3% | ||
| 10:00AM | Feb Consumer Sentiment (ip) | Feb | 55 | 56.4 | |
| 12:00PM | Fed Jefferson Speech | ||||
| 3:00PM | Dec Consumer credit (bl) | Dec | $8B | $4.23B | |
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