What's Up With Friday's Sell-Off?

What's Up With Friday's Sell-Off? Bonds lost ground today and it definitely wasn't as simple as traders having second thoughts about the strength of today's jobs report. While it's true that the 3.8% unemployment rate overstated last month's shift (due to the rise in the participation rate), it's also true that this is the first time since 2020 that NFP has been under 200k for 2 consecutive months (revisions are unlikely to change that, given the prevailing trend). The lopsided nature of the selling pointed to yield curve considerations and the odd combination of positioning for an NFP Friday, a Friday before a 3 day weekend, and the first day of a new month all at the same time. It wasn't officially an early closer, but the bond market got in and got out by lunch, leaving 10yr yields 7.5bps higher. MBS only lost an eighth and change due to curve steepening (shorter-term yields fared better and MBS aren't expected to be as long-lived as 10yr Treasuries). Econ Data / EventsNFP187k vs 170k f'cast, 157k prev Unemployment 3.8 vs 3.5 f'cast/prev Participation Rate62.8 vs 62.6 prev Wages0.2 vs 0.3 f'cast, 0.4 prev ISM Manufacturing PMI47.6 vs 47.0 f'cast, 46.4 prev Construction Spending0.7 vs 0.5 f'cast, 0.6 prev Market Movement Recap08:57 AM Initially stronger after jobs data but gains evaporating now. 10yr down only 1.1bps at 4.095. MBS up 3 ticks (0.09), but down an eighth from the highs. 09:43 AM Well into the red now with 10s up 3.2bps at 4.134 and MBS down almost an eighth. 10:44 AM Weakest levels of the day with 10yr up 7.5bps at 4.18 and MBS down 3/8ths. 03:09 PM Decent recovery after the last update with 10yr yields grinding down to 4.17% and MBS now down only an eighth of a point.

September 1, 2023 Download our Mobile App: Download our Mobile App: MBS Commentary What's Up With Friday's Sell-Off? What's Up With Friday's Sell-Off? Bonds lost ground today and it definitely wasn't as simple as traders having second thoughts about the strength of today's jobs report. While it's true that the 3.8% un... (read more) Rob Chrisman LO Jobs; Jumbo and Non-Agency News; Bond Market Digests Higher Unemployment Rate Some things in life are fleeting, like a frosty glass of rose, enemy troops singing Christmas carols in the trenches during WWI, or the time when lenders couldn’t hire people fast enough because rates were at 3 percent. I mention this because Krispy ... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.08% +0.01% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.08% +0.01 0.00 15 Yr. Fixed 6.45% 0.00 0.00 30 Yr. FHA 6.68% +0.01 0.00 30 Yr. Jumbo 7.25% +0.01 0.00 5/1 ARM 6.97% -0.01 0.00 30 Yr. VA 6.66% +0.01 0.00 Updates Daily - Last Update: 9/1 15 Yr. Fixed Rate 6.45% +0.00% Rate Change Points Freddie Mac 30 Yr. Fixed 7.18% -0.05 0.00 15 Yr. Fixed 6.55% 0.00 0.00 Updates Weekly - Last Update: 8/31 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.16% +0.07 0.68 15 Yr. Fixed 6.57% +0.06 0.94 30 Yr. Jumbo 7.11% +0.07 0.55 Updates Weekly - Last Update: 8/16 MBS / Treasuries UMBS 30YR 5.5 98.64 -0.13 Price / Yield Change MBS UMBS 5.5 98.64 -0.13 UMBS 6.0 100.17 -0.09 GNMA 5.5 98.92 -0.08 GNMA 6.0 100.27 -0.06 Pricing as of: 9/1 5:31PM EST 10 Year US Treasury 4.1810 +0.0750 Price / Yield Change US Treasury 2 YR Treasury 4.876 +0.013 5 YR Treasury 4.296 +0.047 7 YR Treasury 4.265 +0.062 10 YR Treasury 4.181 +0.075 30 YR Treasury 4.298 +0.089 Pricing as of: 9/1 5:31PM EST Latest Video Home prices may be turning lower The Fed will prove it's done enough by the November meeting, says BNP's Car... The recession has ‘at least been delayed': Cerity Partners’ Jim Lebenthal Econ data is now very consistent with a soft landing, says Goldman's Hatziu... Around the Web CNBC Home prices may be on the verge of cooling off Marketwatch Treasury yields turn mostly higher after inflation comments by Fed's Mester Calculated Risk Blog August Employment Report: 187 thousand Jobs, 3.8% Unemployment Rate CNBC Here's where the jobs are for August 2023 in one chart CNBC Student loan interest resumes today what that means for borrowers CNBC Student loan payments restart in October here are changes borrowers can expect CNBC Here are 3 costly financial surprises for first-time homebuyers and how to prepare for them Calculated Risk Blog ISM Manufacturing index Increased to 47.6% in August Calculated Risk Blog Asking Rents Down 1.2% Year-over-year Calculated Risk Blog Freddie Mac House Price Index Increased in July to New High; Black Knight Index Hits New High, but "Mixed signals" Eye on Housing July Gains in Private Residential Construction Spending CNBC Home prices may be on the verge of cooling off Calculated Risk Blog Comments on August Employment Report

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