Without discussing what tomorrow may bring for bond markets, we can safely say that today was big.  Both in terms volumes and outright trading levels, we haven't seen a bigger combo since the big stock sell-off in early October, and that came near the top of the rate range.  Today was arguably much more significant because it occurred as rates were already pushing multi-month lows.  

Today was big in a good way in the sense that yields made it all the way down to 2.826%.  But the same level raises risks of a technical bounce.  After all, 2.82% is the resistance level we've been watching for the past 2 sessions and we bounced fairly hard there today (10's ended at 2.89%).

At the risk of stating the obvious, a lot could be riding on tomorrow's jobs report.  We have NFP built up to pass some sort of judgment about the nature of the economic cycle and the current state of Fed policy.  While it can't do the former, it could play a part in the latter.  Even if it doesn't move markets, if that absence of movement follows a much stronger NFP number, it would tell us that bonds are highly determined to remain at these lower levels--at least until the Fed has its say in a week and a half.  If an absence of movement follows a weaker number, it would suggest this leg of the bond market rally has run its course.  No matter how things actually shake out, the important point is that tomorrow's NFP has much greater than normal potential to create volatility.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 4.0
101-02 : +0-05
10 YR
2.8920 : -0.0310
Pricing as of 12/6/18 5:28PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:33PM  :  ALERT ISSUED: Heads-Up: MBS a Quarter Point Off Highs, but Reprice Risk Will Vary
9:53AM  :  Gloomy Data, Fed Speakers, Pundits, All Helping

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Chris Stevens  :  "“As part of its shift­ing plans, of­fi­cials are weigh­ing how to mod­ify lan­guage in a cen­tral bank pol­icy state­ment that since De­cem­ber 2015 has de­scribed plans for “grad­ual in­creases” in the fed-funds rate. In Jan­uary, of­fi­cials qual­i­fied the phrase by adding the word “fur­ther” to sig­nal greater con­vic­tion in their plans.”. WSJ"
Chris Stevens  :  "Nick Timiraos WSJ- “Fed­eral Re­serve of­fi­cials are con­sid­ering whether to sig­nal a new wait-and-see men­tal­ity af­ter a likely in­ter­est-rate in­crease at their meet­ing in De­cem­ber, which could slow down the pace of rate in­creases next year.”"
Timothy Baron  :  "Lock desks are playing defense, for sure GD."
Gilbert Denizard  :  "hey guys, question. Have you seen rates fall much this week or does it seem like everyone is holding ground to increase spreads?"
Oliver Orlicki  :  "Hard bounce off 2.82"
Matthew Graham  :  "I feel like everything we've heard from them in the past 2 weeks has all but confirmed the "wait and see" mentality is coming to a Fed Announcement near you in 2019"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Dec 06
8:15 ADP National Employment (k)* Nov 179.0 195 227
8:30 Labor Costs Revised (%) Q3 0.9 1.1 1.2
8:30 Productivity Revised (%) Q3 2.3 2.3 2.2
8:30 Jobless Claims (k) w/e 231 225 234
10:00 ISM N-Mfg PMI * Nov 60.7 59.2 60.3
10:00 ISM N-Mfg Bus Act * Nov 65.2 62.0 62.5
Friday, Dec 07
8:30 Non-farm payrolls (k)* Nov 200 250
8:30 Unemployment rate mm (%)* Nov 3.7 3.7
10:00 1yr Inflation Outlook (%)* Dec 2.8
10:00 Consumer Sentiment Dec 97.0 97.5
10:00 5yr Inflation Outlook (%)* Dec 2.6