It’s been a fairly simple morning so far for the bond market. Both of the morning’s key economic reports came in weaker than expected. In the case of ADP employment, that’s fairly straightforward and fairly substantial (37k vs 115k f’cast), even though it’s always worth remembering how inconsistent the correlation with NFP (Friday’s big jobs report) can be. The ISM Services (or “non manufacturing”) data was more nuanced.  The growth metrics were mostly weaker, and decidedly so.  But the employment index moved up–always important on jobs week.  In addition, the ISM price index continues to surge–something that bonds can’t help but notice.

The San Francisco-based bank was long hamstrung by a regulatory order that kept it under $1.95 trillion of assets. Now Wells can hit the gas on business lines it had kept idle.

The software firm will employ Wolters Kluwer’s technology that allow it to offer hybrid closings as well as remote online notarizations through its platform.

The Detroit company intends to pay at least $1.9 billion of the servicer’s senior notes due through 2028, and could cover another $3 billion due through 2032.

The new notes redeem older ones issued in 2018 and address the kind of near-term obligation that analysts have monitored closely at nonbank mortgage firms.

The defunct Trident Mortgage, whose obligations were handled by Home Services of America, was accused of “systemic racism” in lending around Philadelphia.

JOLTS Data Didn’t Help, But it Didn’t Hurt Much Either

Bonds were moderately stronger overnight and then weaker after the 10am JOLTS data. The data itself was mixed with Job Openings higher (bad for rates) and job quits lower (good for rates). The headline took precedence and pushed yields back into higher territory on the day. Selling ebbed in the PM hours and MBS ultimately made it back to positive territory. Headlines regarding the Senate taking up the budget bill are ramping up, but with no discernible impact on the bond market so far.  Bottom line, a roughly unchanged close in bonds requires very little explanation.  On to the next data with ISM Services on Wednesday!

Econ Data / Events

Job Openings

7.391m vs 7.1m f’cast, 7.2 prev

Job Quits (lower is better for rates)

3.194m vs 3.332m prev

Market Movement Recap

09:57 AM Slightly stronger overnight.  MBS up 2 ticks (.06) and 10yr down 3.7bps at 4.409 ahead of JOLTS data.

10:44 AM Weaker after data.  MBS unchanged and 10yr up half a bp at 4.441

12:59 PM 10yr yields are up 2.4bps at 4.47 and MBS down nearly an eighth on the day.

04:26 PM Decent recovery.  MBS up 2 ticks (.06) and 10yr close to unchanged at 4.451

The Department of Justice is seeking to terminate a Biden-era lending discrimination settlement with Lakeland Bank. Last month, the DOJ took similar action in a case involving Mississippi-based Trustmark National Bank.

Fischer, who served on the central bank boards of both Israel and the United States and served as the Federal Reserve vice chair from 2014 until 2017, died Saturday at age 81.

The company wants some holders of bonds due next year to allow a higher debt-to-equity ratio so it can pursue strong returns while managing certain risks.