If we went back to Monday morning and learned that today's NFP number would come in at 224k, any sane person would have guessed yields would be much higher than they are this afternoon.  At the time, 10s were just over 2.02%, and we ended today at just under 2.04%.  That's a huge victory in more ways than one.

Yes yes yes... the losses were pretty big today (8.6bps in 10yr yields and 3/8ths of a point in MBS), but everything's relative.  Keep in mind that markets were positioned for a disappointing NFP based on the balance of data in the rest of the week.  So we had to sell-off, not only in response to the strength of NFP, but also in response the absence of NFP weakness (i.e. there was extra strength on Wednesday that bonds didn't truly "earn").   That's why I bring up the "Monday morning" point, because it emphasizes the true size of today's weakness.

In addition, today is a victory on an outright basis and in a technical sense.  The top of the recent range (post-June 19th Fed Day) has been 2.06+, and that's precisely where we bounced today.  

All of the above having been said, there is still a risk that today serves as a the scene of a bounce.  We've been on the lookout for a technical correction for several weeks without any threatening examples taking shape.  Powell has his semi-annual congressional testimony next week and if this jobs report seems to carry much weight with him, it could add to rising rate risks.  But the biggest contributor would be additional economic data that supports the same economically friendly conclusion.


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 3.0
100-27 : -0-12
Treasuries
10 YR
2.0390 : +0.0840
Pricing as of 7/5/19 6:03PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:58AM  :  ALERT ISSUED: Bond Sell-Off Getting Ugly
8:37AM  :  ALERT ISSUED: NFP Much Stronger; Bonds Weakening as Expected

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "45 days gets you another Fed meeting and another NFP for starters. Bonds have been overbought for about as long as I've ever seen them remain overbought outside of uncommonly bullish time frames like mid-2011 and mid-2012. mid-May 2019 was a much easier call. Is there a good chance rates will be lower by the end of the year? Yes, but in the next 45 days? Anyone's guess."
Dmitry Rockman  :  "Any recommendations on lock/float for consumer closing in next 45 days with 45days lock coming at .125% premium ?"
Mike Christensen  :  "In my opinion, any tool that is available to make you stand out as a better LO-you should have. At my company, I am the only one that has MBS Live and I am the one that always gets e-mails from the LO'S wanting to know when to lock. I am too nice I guess. MG-Up the ante on the referral program. Lol"
Timothy Baron  :  "I don't think there's much new info there for MBSLivers, but the graph with revisions added is worth a look."
Timothy Baron  :  "Interesting graph in this article: https://projects.fivethirtyeight.com/jobs-report-growth-unemployment/"

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Jul 05
8:30 Non-farm payrolls (k)* Jun +224 160 75
8:30 Unemployment rate mm (%)* Jun 3.7 3.6 3.6