MBS RECAP: All Things Considered, Better Than it Might Have Been

Posted To: MBS Commentary

Bond markets lost ground today, but less than you might expect given several of the typical inputs. In terms of economic data, this morning's ADP Employment Report made a fairly strong case for weakness in bonds , coming in at 253k vs a median forecast of 185k. While rates did indeed move higher following the data, half of the losses were already intact from the overnight session. Moreover, bonds would go on to fully erase the post-ADP losses by the 3pm CME close. Making all of the above slightly more impressive was the fact that stocks moved to new record highs. There's no rule that says yields have to follow stocks, but over shorter time frames, it is the more common eventuality. Bonds faced further pressure from the unwinding of yesterday's salubrious month-end tradeflows as...(read more)

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