The weeks that contain the first Friday of any given month have a flavor all their own.  Several of the month's most important pieces of economic data come out with Friday serving up the headliner in the form of Nonfarm Payrolls.  There's no set formula for how bond markets trade in the run up to NFP Friday, but there tends to be greater potential for volatility, even if it's earlier in the week.

Some of that extra, seemingly-NFP-related potential can have to do less with pre-NFP momentum and more to do with the reshuffling of a new month's trading positions after the previous month closes.  We might look at the following chart, showing the first major divergence of the year in the "risk-off" trade and wonder if it had more to do with Japan's surprise rate cut (central bank policy is helpful for both stocks and bonds) or if it was a byproduct of the month-end trading environment.

2016-1-31 10yr and friends

If the divergence in the chart has something to do with the hand-off from one month to the next, we're more likely to see that reflected in today's trading.  It's a bit of a complication that today's data is fairly robust with Incomes/Outlays at 830am and ISM Manufacturing at 10am.

Tuesday is data-free and Wednesday begins the final approach to NFP Friday with ADP Employment at 8:15am  and ISM Non-Manufacturing at 10am. 

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
104-21 : +0-00
10 YR
1.9360 : +0.0060
Pricing as of 2/1/16 7:30AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Feb 01
8:30 Personal consump real mm (%)* Dec 0.3
8:30 Consumption, adjusted mm (%)* Dec 0.1 0.3
8:30 PCE price index mm (%)* Dec 0.0
10:00 ISM Manufacturing PMI * Jan 48.1 48.0
10:00 Construction spending (%)* Dec 0.6 -0.4
Tuesday, Feb 02
9:45 ISM-New York index * Jan 716.6
Wednesday, Feb 03
7:00 Mortgage Market Index w/e 472.8
8:15 ADP National Employment (k)* Jan 195 257
10:00 ISM N-Mfg Bus Act * Jan 58.5 59.5
10:00 ISM N-Mfg PMI * Jan 55.1 55.8
Thursday, Feb 04
8:30 Initial Jobless Claims (k)* w/e 278
Friday, Feb 05
8:30 Non-farm payrolls (k)* Jan 190 292
8:30 International trade mm $ (bl)* Dec -43.0 -42.4
8:30 Private Payrolls (k)* Jan 180 275
8:30 Unemployment rate mm (%)* Jan 5.0 5.0
8:30 Manufacturing payrolls (k)* Jan -2 8
8:30 Average earnings mm (%) Jan 0.3 0.0
8:30 Average workweek hrs (hr)* Jan 34.5 34.5