Yesterday was the first day of major selling that we've seen in more than a month in that 10yr yields moved up more than 5bps from the previous close.  It was slightly more alarming due to the fact that it ended a pretty remarkable little rally that began 8 business days ago.  During that time, 10yr yields fell almost 40 bps (i.e. almost a 5bp/day average).  That's remarkable because there really weren't any singular headlines in the traditional sense (Theresa May resignation and Mexico tariff announcement were the biggest contenders).  

The bounce put increased focus on today's trading.  Would it be a continuation of the weaker momentum or a confirmation that bonds would like to consolidate in this new range.  The answer depends on when you look and how you look at it.  Most simply put, the fact that 10yr yields are only 1.6bps higher at 5pm suggests this is a sideways consolidation, albeit one that may only wait for tomorrow's European Central Bank announcement before breaking out.  

The other way to look at it would be to say that yields attempted to move lower this morning after the weak ADP data and were unable to gain traction below the 2.07% technical level.  With the rest of the day spent grinding back to the next technical level on the ladder (2.12-2.13%) we could conclude that the rally is seeing "resistance, but not panic." 

Panic would be reserved for unfriendly surprises from the European Central Bank tomorrow or NFP the day after.  

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
100-10 : -0-02
10 YR
2.1370 : +0.0160
Pricing as of 6/5/19 4:59PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:32AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
8:34AM  :  Bonds Improve Following ADP Data

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Jun 05
7:00 MBA Purchase Index w/e 253.1 259.4
7:00 Mortgage Refinance Index w/e 1335.6 1255.4
8:15 ADP National Employment (k)* May 27.0 180 275
10:00 ISM N-Mfg PMI * May 56.9 55.5 55.5
Thursday, Jun 06
8:30 Jobless Claims (k) w/e 215 215