In the week just past, bonds avoided a negative correction following the previous week's Fed-induced rally.  There was plenty of back and forth, but it was all contained inside the range of yields seen on June 19th (Fed day).  By the end of the week both stocks and bonds (but mostly stocks) were more and more willing to react to trade-related headlines as the G20 summit approached. 

Over the weekend, there was a so-called "trade deal" between the US and China.  On the approach, this was something for fans of low rates to be concerned about, but not to fear.  It wasn't as if the issues would be fixed in one day or even that the apparent fixing of the issues on paper would be worth much until the rubber met the road (i.e. we need to see what the practical effects are rather than the policy promises).    The bond market heartily agreed, with the trade news reaction completely lost inside the broader consolidation pattern.

2019-7-1 open

By design, that pattern will break this week, and it will be the balance of economic data that's most likely to do the trick.  There is a chance that the breakout will be underwhelming if the data threads the needle and avoids making a strong comment on economic momentum.  There is also a chance of a big reaction if the data firmly rejects or confirms the recent trend of weakness (and/or "less strength").

The biggest ticket is definitely Friday's NFP, but other reports are perennial top-tier runners up.  These include both of the ISM PMIs (Mon/Wed) and ADP Employment.  The market closures (early close on Wed and fully closed on Thu) will only add to the potential for 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 3.0
100-25 : +0-01
10 YR
2.0120 : +0.0120
Pricing as of 7/1/19 9:35AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Jul 01
10:00 ISM Manufacturing PMI * Jun 51.0 52.1
10:00 Construction spending (%) May 0.1 0.0
Tuesday, Jul 02
9:45 ISM-New York index Jun 882.1
Wednesday, Jul 03
7:00 Mortgage Refinance Index w/e 1949.5
7:00 MBA Purchase Index w/e 266.3
8:15 ADP National Employment (k)* Jun 140 27
8:30 International trade mm $ (bl) May -54.0 -50.8
8:30 Jobless Claims (k) w/e 223 227
10:00 ISM N-Mfg Bus Act * Jun 60.0 61.2
10:00 ISM N-Mfg PMI * Jun 55.9 56.9
10:00 Factory orders mm (%) May -0.5 -0.8
Friday, Jul 05
8:30 Non-farm payrolls (k)* Jun 160 75
8:30 Unemployment rate mm (%)* Jun 3.6 3.6