To everything, there is a season.

The sun also rises.

Nothing lasts forever.

Regardless of the words used to describe the phenomenon, there is undeniably a natural shift of energy that CAN take place when something has been happening in a certain way for a certain time.  For bond markets, the longer and bigger a certain move, the greater the risk becomes that the move will run into a correction.  The correction might be no big deal in the bigger picture, and it might fizzle out fairly quickly, but it's a bridge that must be crossed nonetheless.

In the current case, we've had 3 great days of moderate gains to start the week.  All of the movement has come with little help from major news or events (i.e. bonds wanted to rally--they weren't forced or dragged against their will).  The rally brings us to 'overbought' territory in terms of short term momentum today.  At the same time, yields are hitting technical resistance from the simple horizontal line at 2.30% in 10yr yields.  

These forces combined are enough for us to be cautious today.  Overnight losses aren't so extreme that we should conclude broader positive momentum is dead (indeed, the lower section of the chart shows that it's not).  Today's (and tomorrow's) performance will let us know much more about how that broader trend might evolve.  If 10yr yields were to push back toward 2.40%, things would be getting dicey.

2017-2-9 open

The afternoon's 30yr bond auction is the only focal point today with respect to scheduled potential market movers (Jobless Claims is an "ex market mover").   

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
102-20 : -0-07
10 YR
2.3575 : +0.0175
Pricing as of 2/9/17 8:37AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, Feb 09
8:30 Initial Jobless Claims (k)* w/e 250 246
8:30 Continued jobless claims (ml)* w/e 2.060 2.064
13:00 30-Yr Bond Auction (bl)* 15