MBS Day Ahead: Bonds Have a Chance

Posted To: MBS Commentary

Today brings the sometimes super important nonfarm payrolls data. On average, no other piece of economic data has had as much of an impact on bonds over the years, but it's been hit and miss in recent years. That has a lot do with the fact that the labor market has been so strong in terms of payroll counts and unemployment rates. Another high reading (anything over 160k, give or take) simply isn't a market moving surprise unless we're talking about something over, say, 250k. That said, the numbers continue to have some market moving potential as a harbinger for an economic shift. In other words, things have been good and stable, but if the economic cycle begins to change, this is one of the first places we'd notice. Even then, it would take more than one bad number to get traders...(read more)

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