This is Matt Graham with the MBS Live market update. Last week was an interesting one for the bond market, if for no other reason than it contained the biggest rally day for bonds since October 10th, 2025. More on the reasons, in a moment, economic data was certainly a factor and there was some data that was missing due to lagging effects from the very short government shutdown. More on that in a moment, recapping the data as it came out on Monday. We had ISM manufacturing. This is typically the lesser of the two ISM reports in terms of potential market movement, but in last week’s case, it was the bigger impact because it came in so far above forecast, ISM manufacturing PMI at 52.6 versus 48.5. That’s only the second time. It’s been above the level of 50 since late 2022, and it is by far and away the highest reading since late 2022. This was worth a fairly sharp but well contained selloff in the bond market. That took yields up to 4.28 and changed by the end of the day. For context, the initial selling impulse was only roughly 4.25 to 4.28. Things went pretty quiet after that for the next two days. Partly because we were missing the jolt report, job openings and labor turnover survey on Tuesday, but also because Wednesday’s data failed to cause any major reaction and that is one of the more interesting developments of the week because Wednesday had the best lineup for potential market moving economic data with a DP employment and ISM non-manufacturing. A DP came out at 202K versus a 48K forecast and 37K previously in the realm of payroll count data. That’s not actually that big of a miss, and it’s not a huge surprise to see bonds not do much with that result and then ISM Services came out at 53.8 versus 53.5, very close to forecast, and certainly not justification for a big reaction in the bond market. Thursday was a different story and it came down to three labor related reports. First off was the off the beaten path, challenger Job Cut Report. This catalog’s massive layoff announcements from. Big companies. It’s not the kind of thing that is going to capture a broad swath of, uh, layoff data, such as the jolt report, but it is a bit more timely. It’s also more volatile. Doesn’t tend to be a huge market mover, but in this case, it did have an impact, both in terms of volume and volatility in the late overnight session because it came out at 108,000 versus a 35,000 previous reading. Quite a big. Shift then jobless claims at 8:30 AM Eastern Time, 231K versus 212 and that is the biggest miss in a while. The highest reading in a while and it ends this sort of puzzling winning streak that jobless claims have had over the past few weeks that got even more volume and even bigger positive reaction in the bond market. But uh, the third and final report was the biggest one of the morning, and that was the delayed jolt data. Again, that’s the job openings and labor turnover survey. The most important component there is the level of job openings. And even though this runs a month behind the official jobs report, it is still a worthy market mover at times. And in this case, it came in at 6.54 versus a 7.2 forecast. That is a very big miss, the lowest reading of the cycle, and definitely, a justification for the bond market to rally and rally it did, between those three reports yields in 10 year treasuries moved from 4.28 all the way down to 4.16. Although it’s worth noting that during that time, stocks were selling off and there were other market movers as well. But if we are simply crediting the data, we could say. From 4.26 to at least 4.22 was a product of the data. Nothing happened on Friday because the jobs report was postponed until this week. The jobs report will now be coming out on Wednesday. That’s this week’s focal point. And CPI is also delayed until Friday, so jobs report on Wednesday. Consumer price index on Friday, and, if nothing else, the reaction to last Thursday’s labor market data suggests that the market is very willing to react to the jobs report on Wednesday and I would even say that some of the reaction last Thursday acted to price in some bearish expectations for Wednesday’s jobs report. Thus, if the jobs report comes out merely in line with forecasts, it could be taken as a negative thing for the bond market. But as always, no way to know ahead of time. We’ll see what we see when we see it. That’ll do it for this week. Back to you.
Matt Graham, Founder and CEO, MBS Live
Matt began as an originator in 2002. He fell in love with the idea of following MBS in real-time but felt that existing products were only scratching the surface. Thus was born MBS Live in 2007, the first-of-its-kind platform with real-time market data/analysis, and live chat with analysts, traders, and originators around the country. He is currently the Founder and CEO of MBS Live!
He’s been covering bond/mortgage markets, writing commentary, alerts, and chatting with the live community every business hour of every business day ever since.
Matt also serves as the Chief of Operations for mortgagenewsdaily.com, where he is one of the industry’s most respected mortgage rate experts, frequently quoted in the media. Mortgage News Daily’s rate index is used as the definitive resource on day-to-day mortgage rate averages.
He lives in the Pacific Northwest with his wife and son where he enjoys skiing, fishing, coaching youth sports, playing the guitar, and more DIY projects/hobbies than he’d care to admit.