MBS Day Ahead: Much Weaker Jobs Report Provides a Friendly Reminder For Bonds

Posted To: MBS Commentary

While it's essentially a given the bigger stimulus is on the way with democrats controlling the senate (thus implying more Treasury issuance and a quick adjustment to higher yields as a result), it's worth remembering that the underlying phenomenon creating the need for that stimulus is still a thing. Today's big miss in the December jobs report provides a solid reminder. Sure, bigger stimulus pushes rates higher, but covid-driven economic realities continue trying to hold rates down (with plenty of help from the Fed). Jobs numbers like today's do absolutely nothing to push the Fed away from its ultra bond-friendly stance. Here's a quick run-down: Nonfarm Payrolls -140k vs 71k f'cast, 336k prev Unemployment Rate 6.7 vs 6.8 f'cast, 6.7 prev Notably, the 336k was revised…(read more)

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MBS Day Ahead: Much Weaker Jobs Report Provides a Friendly Reminder For Bonds
MBS Day Ahead: Much Weaker Jobs Report Provides a Friendly Reminder For Bonds

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