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MBS prices slipped and Treasuries turned after weaker jobs data

Mortgage-backed securities were up earlier in the session, but finished lower, while the 10-year Treasury yield ended higher at 5.28%.

Reported · Written up by our desk · Mortgages

Mortgage News Daily reports that bond markets sold off even after a weaker jobs report, arguing that the day’s biggest negative surprise was nonfarm payrolls coming in weaker rather than a jump in unemployment.

The outlet said the unrounded unemployment rate barely moved, and would have edged lower under 4.00% without an increase in labor force participation. It also pointed to higher oil prices contributing to intraday weakness, along with a recovery in French credit spreads.

By the end of the session, Mortgage News Daily said mortgage-backed securities were down about a quarter point, while the 10-year Treasury yield rose about 4 basis points to 5.28%, after earlier action saw the 10-year yield down 4.1 basis points to 4.198%.

The recap concluded that the jobs report did not sow broader doubts about cracks in the labor market, describing the market reaction as dialing back from an initial stronger move.

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