MBS MID-DAY: 10/7/2011


– Headline NFP up 103k vs 60k estimate
– August and July together were revised 99k higher
– 45k of NFP headline due to returning Verizon workers

Bond markets haven’t taken the news well but may be showing signs of stabilizing. 10 yr yields have had a few bounces around 2.10 and are currently at 2.098. Fannie 3.5 MBS are down half a point on the day at 101-20.

We’re past the point now of hoping for one of those early bounces back that sometimes occur after a data-inspired knee-jerk reaction, but things could still change quite a bit depending on how the domestic stock session shapes up. If current levels continue to prevail, rate sheets will be significantly worse.

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