Mostly Quiet Ahead of Friday’s Jobs Report

Bonds lost a bit of ground on Thursday with most of the weakness seen in the overnight session in sympathy with European bond market weakness. The rest of the selling followed a stronger weekly jobless claims report.  That said, we wouldn’t give the data all the credit based on the timing of the selling and additional back-and-forth throughout the day. Tomorrow is far more interesting anyway. It brings what many view as the first clean reading of the big jobs report since before the government shutdown. Point being: the market will likely be more willing to react to any result that falls far from the median forecast–especially if the job count and unemployment rate both make the same case.

Econ Data / Events

Challenger layoffs (Dec)

35.553K vs — f’cast, 71.321K prev

Continued Claims (Dec)/27

1,914K vs 1900K f’cast, 1866K prev

Jobless Claims (Jan)/03

208K vs 210K f’cast, 199K prev

Trade Gap (Oct)

-29.40B vs $-58.9B f’cast, $-52.8B prev

Market Movement Recap

08:54 AM Weaker overnight with Europe and additional selling after Jobless Claims data. MBS down an eighth and 10yr up 2.6bps at 4.181

01:05 PM Sideways near opening levels. MBS down an eighth and 10yr up 1.9bps at 4.174

03:02 PM Same same.  MBS down 3 ticks (.09) and 10yr up 2.7bps at 4.182