Another Day Holding Modest Gains After AM Weakness

Another Day Holding Modest Gains After AM Weakness

By: Matthew Graham

Wed, Jan 4 2023, 4:01 PM

Another Day Holding Modest Gains After AM Weakness

French CPI (of all the crazy things) helped bonds improve in the overnight session, with EU bonds leading the charge for obvious reasons.  This marked the second straight day that Europe helped US bonds begin the domestic session in stronger territory only for domestic events to push back on the gains.  In today’s case, it was primarily the JOLTS (job openings and labor turnover survey) data that caused the weakness, but a majority of the gains remained intact by the 3pm CME close.  The release of the Fed’s meeting minutes had almost no perceptible impact.

    • Job Openings and Labor Turnover Survey
      • 10.458 mln vs 10.512 mln prev
    • ISM Manufacturing
      • 48.4 vs 48.5 f’cast, 
    • ISM Prices Paid 
      • 39.4 vs 42.6 f’cast, 43.0 prev

09:01 AM

Gradual overnight gains and a good reaction to French PMI bringing yields down 7.3bps at 3.679.  MBS up 10 ticks (.31).

10:30 AM

Weakness after 10am data with JOLTS taking precedence over ISM.  MBS up only 3 ticks on the day, down a quarter point from highs.  10yr still down 4bps at 3.711 but up from lows of 3.664

02:03 PM

Limited reaction to Fed Minutes, but slightly weaker, if anything.  10yr still down 3.4bps on the day at 3.72.  MBS still up an eighth of a point, but down an eighth since Fed Minutes.

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Source: mortgagenewsdaily.com