We’ve been surprised and continue to be surprised at just how little there has been to say about today’s post-NFP trading. Everything happened in an eerily logical fashion…
The headline was moderately weaker-than-expected and as one would expect, bond markets rallied moderately. As would be expected, the rally in MBS is somewhat subdued due to nearness to all-time highs.
Ultimately, the day in bond markets will end up looking like a fairly logical extension of a very narrow, very gently sloped, bullish trend. It pushes MBS yields to their widest spreads vs Treasuries since early February. The ball is in their court now (or soon will be) to either continue widening or ramp up 3.0 production if we continue to operate at these levels next week.
There’s been no volatility to speak of in the afternoon. 10yr yields coasted out hovering around 1.88. Fannie 3.5’s are up 5 ticks at 104-02, and stocks have been sideways after losing about 20 pts (SP).