As investors have sought a safe haven from trade-related risks, bonds have benefited more than they otherwise might have and stocks have been restrained.  The trick is that a trade war isn't a thing that hits markets quickly and decisively, so there's more guesswork than normal. 

The well-known fundamental problems for rates (Fed policy, Treasury supply, upside growth potential) all make clear cases for rates moving higher while trade war fears make a highly uncertain case for rates moving significantly lower for an undetermined amount of time.  Traders don't want to get too far on the other side of either of those market movers, and that's precisely why we haven't seen any memorable moves in 2018.

Looking back at the past, we can see that such periods of indecision can only last for so long. Friday brings the big jobs report as well as the implementation of billions of dollars in new tariffs on Chinese goods (and the expectation of retaliation). These two big-ticket events could cause a big move if they both push rates in the same direction, but they could also effectively "cancel each other out." Either way, the jobs report arrives "all at once" right at 8:30am ET whereas trade-related impacts could be felt throughout the day.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 4.0
102-00 : +0-01
Treasuries
10 YR
2.8309 : -0.0091
Pricing as of 7/6/18 8:10AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Friday, Jul 06
8:30 Average earnings mm (%) Jun 0.3 0.3
8:30 Non-farm payrolls (k)* Jun 195 223
8:30 Unemployment rate mm (%)* Jun 3.8 3.8