Another Mid-Day Reversal. Does Jobs Report Even Matter?

Another Mid-Day Reversal Driven by Dueling Headlines The overnight session featured a modest but clearly-defined rally in response to hopeful headlines on the Iran war. But as early a 9am ET, a complete reversal was beginning to take shape. Bonds remained in positive territory until the 11am hour when war headlines kicked selling into higher gear. Specifically, reports suggested Iran rejected the U.S. framework that helped bonds overnight. Separate news cited CIA sources, claiming Iran can withstand a Hormuz blockade for months. Selling continued in the afternoon on reports that had more to do with escalation risks (Saudi Arabia and Kuwait allowing U.S. forces to operate from their bases, explosions heard in Southern Iran). All told, 10yr yields were up more than 4bps by 3pm and MBS were down a quarter point. Econ Data / Events Challenger layoffs (Apr) 83.387K vs -- f'cast, 60.62K prev Continued Claims (Apr)/25 1,766K vs 1800K f'cast, 1785K prev Jobless Claims (May)/02 200K vs 205K f'cast, 189K prev Unit Labor Costs QoQ FinalQ1 2.3% vs 2.6% f'cast, 4.4% prev Market Movement Recap 08:32 AM stronger overnight and no reaction to econ data. MBS up an eighth and 10yr down 1.5bps at 4.331 11:31 AM moving into weaker territory now. MBS down 1 tick (.03) and 10yr up 1.4bps at 4.361 01:13 PM New lows for MBS, down 5 ticks (.16) on the day. 10yr up 3.4bps at 4.38 03:00 PM MBS at new lows, down 9 ticks (.28) and 10yr up 4.3bps at 4.39