Surprisingly Light Volatility

Surprisingly Light Volatility Bonds digested several big ticket economic reports as well as a host of war-related headlines that probably would have caused a much bigger reaction a few weeks ago. But the net effect was an almost perfectly flat day by the 3pm CME close. If anything, the data caused some weakness and we can say bonds would have rallied more noticeably otherwise. The weak response is no surprise considering all 3 reports were stronger than expected. This also serves as a reminder that Friday's jobs report is still a relevant market mover despite a general focus on the war and energy prices.  Econ Data / Events ADP Employment 62k vs 40k f'cast, 63k prev Retail Sales 0.6 vs 0.5 f'cast, -0.2 prev Core Retail Sales 0.5 vs 0.3 f'cast, 0.2 prev ISM Manufacturing 52.7 vs 52.5 f'cast ISM Prices Paid 78.3 vs 73.0 f'cast, 70.5 prev Market Movement Recap 08:24 AM slightly stronger overnight with a bit of selling after ADP. MBS still up an eighth and 10yr down 1.3bps at 4.301 08:38 AM Giving up gains after Retail Sales. MBS unchanged and 10yr up half a bp at 4.317 11:04 AM Recovering some ground now. No particular reason. MBS up an eighth and 10yr down 1.2bps at 4.301 01:43 PM MBS up about an eighth and 10yr roughly unchanged at 4.313 03:23 PM MBS up only 2 ticks (.06) and 10yr up 1.6bps at 4.33