Calm and Slightly Stronger, But Volatility Will be Back

Once or twice per week, the bond market manages to post a fairly calm trading day against the prevailing backdrop of generally higher volatility. Today was such a day. The most helpful catalyst was an absence of any major war-related headlines and associated oil price volatility. That said, it’s a near certainty that war-related volatility will be back in the coming week. 

Econ Data / Events

Average earnings mm (Apr)

0.2% vs 0.3% f’cast, 0.2% prev

Non Farm Payrolls (Apr)

115K vs 62K f’cast, 178K prev

Participation Rate (Apr)

61.8% vs — f’cast, 61.9% prev

Unemployment rate mm (Apr)

4.3% vs 4.3% f’cast, 4.3% prev

Consumer Sentiment (May)

48.2 vs 49.5 f’cast, 49.8 prev

Sentiment: 1y Inflation (May)

4.5% vs — f’cast, 4.7% prev

Sentiment: 5y Inflation (May)

3.4% vs — f’cast, 3.5% prev

Market Movement Recap

08:32 AM No major reaction to jobs report. MBS up 2 ticks (.06) and 10yr down 1.5bps at 4.375

10:46 AM Slightly stronger but leveling off.  MBS up 6 ticks (.19) and 10yr down 3.6bps at 4.356

02:13 PM MBS up 5 ticks (.16) and 10yr down 3.5bps at 4.356