Despite the fact that markets were 90%+ certain that the Fed was done hiking, both the equity and fixed-income markets were surprised that the hawkishness disappeared.
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The big focus in the coming week is on central banks, with company reporting season winding down. Expectations have been growing for rate cuts next year, so.
Surprisingly Resilient Despite Stronger NFP
Nonfarm Payrolls (NFP) the headline component of the big jobs report came in higher than expected today.  Adding to the challenges for the bond market, the unemployment rate ticked down to 3.7% from 3.9% previously (also the forecast for today). Given the stakes, we wouldn't have been surprised to see a sharper spike in rates today.  Treasuries know. They spiked 8bps not huge, but in the range of likely reactions based on the data.  So what's up with MBS only losing an eighth of a point?  It's not a duration issue (after all, 5yr Treasuries had a worse day than 10s).  One of the only ways to reconcile the outperformance is to consider apprehension ahead of next week's Treasury auction cycle.  Everything else that merits apprehension (like CPI and Fed Day) would apply to MBS as