Bonds cling to modest gains ahead of jobs report

Bonds cling to modest gains ahead of jobs report

Thu 4 August 2022, 16:31

Bonds started the day with a slight boost from Europe’s reaction to the Bank of England’s announcement (emphasis on “light”). The gains faded as the NYSE opened at 9:30 am approaching, but rebounded in short order. MBS and Treasuries have remained sideways in slightly stronger territory since then. In doing so, yields opted to stay below the 2.71% pivot point that had offered resistance on several occasions since breaking through the ceiling on Tuesday. This is a resilient performance ahead of Friday’s big jobs report, not one that suggests too much exuberance. Simply put, bonds look poised to digest (and react to) any major message about the economy in the jobs data.

    • Unemployment benefit claims
    • Continuing claims

09:51

Stronger in the late night session after the Bank of England announcement. No major impact from the data at 8:30 am. Selling pressure until 9am but now finds its way with Treasuries and MBS holding modest gains.

2:40 p.m.

Highest levels of the day just after noon. Light selling since then, but still in positive territory. 10-year down 2 basis points to 2.687. MBS up 3 ticks (0.09) at 100-12 (100.375).

4:28 p.m.

Late weakness beginning around 4:15 p.m. – a time of day that suggests trade flow momentum (as seen in corporate bond pricing). MBS are still up 2 ticks on the day (+0.06) and 10-year yields are still down 1.8bp at 2.687.


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Garland K. Long