The Drift Continues

Bonds only had a small reaction to the stronger Jobless Claims data, despite the reference period being the same as the next NFP number.  Traders were more interested in the lower price pressures reported in the S&P PMI data.  This suggests a certain level of receptiveness to some of the other 2nd tier data that may offer a counterpoint to the most recent CPI.  But that assumes the data is friendly in the first place.  Even if it proves to be friendly, we’re waiting at least a week for the first candidate (PCE next Thursday), and then another week beyond that before getting any top tier data.  In the meantime, bonds are in drift mode, and not the fun kind.

Econ Data / Events

Jobless Claims

201k vs 218k f’cast, 213k prev

Continued Claims

1862k vs 1885k f’cast

S&P Services PMI

51.3 vs 52.0 f’cast
“input prices rose at the weakest pace since October 2020”

Market Movement Recap

08:45 AM Slightly weaker overnight. Brief selling after Claims data, but bouncing back a bit now.  10yr now up only 1bp at 4.329.  MBS down an eighth.

09:57 AM Back in positive territory after PMI data.  MBS up 2 ticks (.06).  10yr down 1.2bps at 4.307.

12:29 PM Back into weaker territory.  10yr up 1.2bps at 4.331.  MBS down 1 tick (.03).

02:39 PM Fairly flat. MBS down 1 tick (.03). 10yr up less than 1bp at 4.327.