The week began on Tuesday, for all intents and purposes.  July's "month-end" trading generally took place by last Friday and Monday was left as a mere afterthought.  Yields fell nicely on Tuesday as "new month" trades unwound July's month-end weakness, perhaps getting some help from ultra-weak GM sales numbers (I know... this may be the first time we've brought "auto sales" into the rate analysis arena).

Rates kept trickling lower from there as traders priced-in a weaker-than-expected jobs report.  After all, a preponderance of anecdotal evidence suggested the median forecast was a bit too high this time around.  But that's the great/funny/frustrating thing about NFP: it always reserves the right to play by its own rules.  Today was one of those days, with payrolls coming in at 209k vs 183k forecast.

Bond traders had clear marching orders.  For some, it was a good opportunity to become sellers again.  Others held out and ultimately acquiesced to selling pressure a few hours later.  Between the two waves of selling, yields moved almost perfectly from one key technical level (2.22%) to the other (2.28%).  In fact yields broke above 2.28% briefly but ended the day in a perfect sideways drift at 2.264.

Fannie 3.5s managed to lose only an eighth of a point by the close, after having been down a quarter point earlier in the day.  Lenders maintained their recent habit of "minimal changes" to rate sheets although a few did offer token improvements with the afternoon gains.

In the bigger picture, we ended up right back in line with the levels seen just after Tuesday morning's "new month" trades.  Given the calendar of events ahead, we might wonder if we'll be waiting until Jackson Hole at the end of the month before seeing the next major wave of momentum in bonds.  

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
103-06 : -0-04
10 YR
2.2637 : +0.0357
Pricing as of 8/4/17 5:53PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:05AM  :  ALERT ISSUED: Some Lenders May Already be Considering Reprices
8:36AM  :  ALERT ISSUED: First Move is Weaker After Jobs Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Wendy Smith  :  "Yep, I locked 3 last night too for the same reason."
John Tassios  :  "i locked 3 closing within 30 days yesterday, based on reasons MG laid out in his recap yesterday."
B C  :  "i am a lifelong anti locker, but i get it."
Timothy Baron  :  "Best to lock until we get towards the top of the recent range."
B C  :  "MG is right, no reason to float"
Jason Anker  :  "ugh"
Matthew Graham  :  "Yeah, just this once"
B C  :  "would you really?"
Matthew Graham  :  "Anyway, I'd continue generally leaning toward locking without a committed break below 2.21-2.22%"
Matt Hodges  :  "fairly easy call on a 7/1 ARM refi today. client happy, rates identical to yesterday. lock, done."
Caroline Roy  :  "pricing isn't actually much different on a couple files i looked at today. locked several yesterday though and am happy about that."
Matthew Graham  :  "liked it more yesterday"
Kurtis Kooiman  :  "Anyone like locking here today?"
Ted Rood  :  "Green, for the lack of a better word, is good."

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Aug 04
8:30 Non-farm payrolls (k)* Jul +209 183 222
8:30 Private Payrolls (k)* Jul +205 178 187
8:30 International trade mm $ (bl) Jun -43.6 -45.0 -46.5
8:30 Unemployment rate mm (%)* Jul 4.3 4.3 4.4
8:30 Average earnings mm (%) Jul +0.3 0.3 0.2