Bonds haven’t been interested in econ data because none of it has had the ability to tell much of a story.  Today’s ADP Employment report is arguably an exception as it was staggeringly stronger than expected.  Other data surprised to the upside, stocks set more multi-month highs, and bonds suddenly find themselves on the run. 

Econ Data / Events

  • 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying  

  • ADP Employment: -2.760m vs -9.000m f’cast, -19.557m prev

  • ISM Non-Manufacturing 45.4 vs 44.0 f’cast, 41.8 previously

  • Factory Orders -13.0 vs -14.0 f’cast

Market Movement Recap

08:35 AM

Bonds were modestly weaker overnight and are now under additional pressure after the much stronger-than-expected ADP Employment Report.  10yr yields up nearly 3bps, but MBS outperforming for now, down only 2 ticks (0.06).

10:08 AM

Additional losses after the 10am econ data (stronger ISM and factory orders).  MBS down a quarter point and 10yr yields up and over the important 0.74% technical ceiling.

12:01 PM

Potentially seeing some support now, but only after things got pretty panicky there for a bit.  10yr yields remain over .74 (they were as high as .771).  2.0 UMBS are now down only a quarter point, but had been down nearly half a point at the lows of the morning.  

02:04 PM

Bonds haven’t hit any weaker levels compared to the 10-11am hour, but they’ve been unable to rebound in any convincing way.  2.0 MBS are still more than a quarter point off and 10yr yields are up 7.4bps at .761.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.


UMBS 2.0

101-21 : -0-08


10 YR

0.7590 : +0.0790

Pricing as of 6/3/20 3:52PMEST

Today’s Reprice Alerts and Updates

10:07AM  :  ALERT ISSUED: Negative Reprice Risk Increases as Postive Data Continues

9:32AM  :  ALERT ISSUED: Weak Enough For This Alert, But Not as Weak as it Seems

8:26AM  :  Bonds Weaken After Massively Stronger-Than-Expected ADP Data

By Matthew Graham , dated 2020-06-03 15:54:00

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Courtesy of Mortgage News Daily

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