Ultimately Underwhelming Despite Seemingly Significant Data

There was certainly the potential for volatility today with the confluence of ADP, ISM, and Job Openings data. But the results ended up being close enough to consensus to obviate any massive reactions. Yields hit their lowest levels in a week after ADP came in slightly softer, but most of the rally was already in place from the overnight session. Stronger ISM and job openings pushed bonds back in the other direction, but not enough to result in bond market losses or negative reprices. 

Econ Data / Events

ADP Employment

41k vs 47k f’cast, -32k prev

ISM N-Mfg PMI (Dec)

54.4 vs 52.3 f’cast, 52.6 prev

ISM Services Employment (Dec)

52.0 vs — f’cast, 48.9 prev

ISM Services New Orders (Dec)

57.9 vs — f’cast, 52.9 prev

ISM Services Prices (Dec)

64.3 vs — f’cast, 65.4 prev

USA JOLTS Job Openings (Nov)

7.146M vs 7.60M f’cast, 7.670M prev

Market Movement Recap

08:17 AM Steadily stronger overnight and slightly stronger after ADP.  MBS up 5 ticks (.16) and 10yr down 4.2bps at 4.123

10:02 AM Losing ground after 10am data. MBS back to unchanged and 10yr down 1.3bps at 4.152

12:06 PM Recovering a bit into mid-day. MBS up 3 ticks (.09) and 10yr down 2.8bps at 4.138

04:42 PM Off the strongest levels, but still in stronger territory. MBS up 2 ticks (.06) and 10yr down 1.6bps at 4.149