MBS Day Ahead: All About NFP, But a Meaningful Reaction Might be Tough

Posted To: MBS Commentary

Today's only significant data point will be NFP, which is the most significant piece of scheduled economic data every month! When the economy is in a state of change, NFP becomes an utterly dominant force in guiding big-picture trading themes. For instance, NFP results would often set the tone for entire months of trading in the 2008-2014 time frame. But as bonds began to push back toward lower yields after topping out at the beginning of 2014, NFP has had less and less power to serve as the key contributor to momentum. This is an important distinction, because it never gave up the power to drive short-term volatility. Traders will always react in a big way to big beats or misses. The point is that those big beats and misses haven't recently been responsible for lasting trends. This...(read more)

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