“Unprecedented Rise in Layoffs: A Deep Dive into January’s Historic Low Hiring Rates”

In recent reports, it was disclosed that intended job cuts skyrocketed to 82,307 within the month, experiencing a substantial increase of 136% compared to the figures from December.

“Analyzing the Expected Easing of Euro Zone Inflation vs. Unanticipated Core Figures”

Fresh data on euro zone inflation for January was recently disclosed by Eurostat.

“Analyzing the Impact of Market Movements and Political Decisions on Mortgage Rates: January 30 Update”

In the past, the Bond market didn’t hold high regard for the Job Openings and Labor Turnover Survey (JOLTS). However, over the last couple of years, it’s gained increased significance as the world attempted to navigate the uncertain labor market in the post-pandemic era. In some instances, it’s even had a more substantial impact than the prominent jobs report. Today, a spike in job vacancies has undone earlier Treasury gains and nudged the Mortgage-Backed Securities (MBS) into a slightly more vulnerable position. Even so, bonds can reflect on the winning streak they’ve maintained in the preceding week and a half, despite today’s setback.

“IMF’s Caution to the British Government: The Risks of Further Tax Reductions”

The main economist at the IMF has highlighted the importance of establishing mid-term financial strategies that can handle a substantial surge in expenditure demands.

“Uplift in Global Economic Projections: The Role of US Resilience and China’s Policy Support”

The International Monetary Fund anticipates a decrease in the chances of experiencing a “hard landing,” as inflation rates appear to be decreasing at a more rapid pace than previously forecasted.

“Analyzing the Surprising Twist in Euro Zone’s GDP for Q4 2023”

On Tuesday, preliminary growth data for the euro zone was unveiled by Eurostat.

“Analyzing the Impact: Federal Reserve’s Decision and its Influence on Mortgage Securities Market”

The bond market got off to a sturdy start, experiencing a subtle boost from rises in both Asian and European markets overnight. The chief part of the domestic phase remained steady and unremarkable until a Treasury refunding update at 3pm. Although it wasn’t the official declaration (set for Wednesday), it provided a sneak peek into the future. Remarkably, the forecasted borrowing needs plummeted by over $50 billion for the period– a substantial reduction. The bond market concurred, indicating a prompt decline in yields. Both 10s and MBS concluded the day at their peak levels in a week and a half. Yet, the next direction remains heavily reliant on impending economic data.

Market Activity Breakdown

10:15 AM – A robust overnight rise, currently steadying. 10yr still down 1.9bps at 4.12. MBS increased by 2 ticks (.06).

02:16 PM – Stable throughout the day with a modest outperformance from Treasuries. MBS up an eighth. 10yr down 4.2bps at 4.097.

03:09 PM – Further accrual post TSY refunding notes. A decrease of 6.5bps at 4.047 for 10yr. MBS slightly under a quarter point increment after pointing to illiquidity.

“Predictions and Perspectives: Economists Discuss the Future of Federal Reserves”

As the two-day summit concludes, experts predict the Federal Reserve is not likely to raise interest rates. In the current economic landscape, economists are noting the increasing likelihood of a situation where no rate hikes take place.

“Unraveling the Implications of December 2023’s PCE Inflation Surge: An Insightful Analysis”

It was anticipated that the fundamental personal consumption expenditures price index would see a monthly rise of 0.2% in December and an annual growth of 3% from the previous year.

“Unraveling the Intricacies of Mortgage Market Trends: A Detailed Recap for January 25, 2024”

Understanding the Paradox of Strengthening Bonds Amid Rising GDP

The Gross Domestic Product (GDP) report usually doesn’t significantly influence the bond or rate markets. Nevertheless, if one could, it’d be the ‘advance’ (the initial release of the three issued each quarter). Significantly, the recent one surpassed the median prediction considerably (3.3 as against 2.0). The economic significance of this surge had potential to raise yields, but surprisingly, bonds strengthened. While certain aspects of the report and other economic announcements have been more bond-centric or more pessimistic, traders have also been influenced by spillages from the European trade, especially the European Central Bank’s unexpected dovish stance.

Economic Data/Events

Unemployment Claims

214k compared to anticipated 200k, 189k previously

Long-Lasting Goods

0.0 against the 1.1 prediction, 5.5 previously

Q4 GDP Figure

3.3%, exceeding the 2.0% expectation

GDP Deflator

1.5, lower than the 2.3 forecasts

Description of Market Movement

At 08:43 AM, seen as mildly stronger after the 8:30am economic data, with a 10-year drop of 4bps at 4.14%. MBS slightly up after adjusting for illiquidity.

At 11:06 AM, noticeable endurance alongside assistance from Europe. A 10-year drop of 5.2bps (4.128), with MBS increasing by 6 ticks (.19).

By 12:20 PM, a touch of weakness observed in Treasuries, which didn’t affect MBS. A 10-year drop of 3.7bps (4.143), with MBS going up 7 ticks (.23).

At 02:30 PM, maintaining near optimal levels after a decent 7-year auction. A 10-year drop of 5.4 bps (4.126), with MBS up 7 ticks (.23).