Love it or hate it, ADP data matters when it's as far from consensus as it was this morning (otherwise, it's been having less and less of an impact).  Even today, that diminished relevance shines through as bond markets sold-off less than they would have if we'd seen a similar 'beat' in 2013.

What this morning's ADP report IS able to accomplish however, is a rounding-out of what has been an almost exclusively positive set of June employment metrics to stand as evidence for tomorrow's NFP verdict.  That collection of data suggests the 212k NFP forecast is too low considering last month's was 217k.  If that happens, NFP will be one of the only June metrics that deteriorated.

All that having been said, it wouldn't be the first time NFP bucked the trend, and in fact the historical tendency is for payrolls to miss in June but for unemployment to improve.  On another positive note, today's sell-off very likely positions bond markets for a slightly higher than expected reading tomorrow.  In other words, some of today's weakness accounts for tomorrow's potential weakness, hopefully allowing bonds to soak up more of a 'beat' without feeling the need to sell-off further.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
97-30 : -0-11
FNMA 3.5
102-06 : -0-10
FNMA 4.0
105-18 : -0-07
2 YR
0.4882 : +0.0232
10 YR
2.6282 : +0.0632
30 YR
3.4634 : +0.0674
Pricing as of 7/2/14 6:36PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:28PM  :  ALERT ISSUED: Negative Reprice Risk Increasing Again
12:29PM  :  ALERT ISSUED: No New Weakness, but Reprice Risk Could be Growing
8:21AM  :  ALERT ISSUED: Bond Markets Quickly Weaker Following ADP

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "call us lucky, but we all invest in this site, which keeps us informed to better maneuver this market for our clients"
Matthew Graham  :  "meh... I get lucky sometimes. Lock/float should only ever be an intraday decision. "
William McGuirt  :  "you nailed it"
Matt Hodges  :  "i locked two Monday, but i couldn't pull the trigger on the others until yesterday. i appreciated the nudge, nonetheless, MG"
Matthew Graham  :  "or better yet, Monday, when I said "anything after today is increasingly risky with the start of July tradeflows" or some such thing."
Matt Hodges  :  "short term lock was yesterday, prior to ADP print"
mark kwon  :  "i think short term better be lock"