In the week just passed, the bond market committed to a perfectly sideways consolidation pattern after having moved down from the highest yields in more than a month.  There were a few moderately relevant economic reports throughout the week and the bond market was surprisingly willing to react to several of them.  That said, trade-related headlines hit the wires in close proximity to some of the econ data, thus muddying the waters of market movement investigation.  To be sure, the biggest spikes in volume were definitely reserved for the unexpected news headlines, but this time around they didn't generate as much movement in prices/yields as they have in recent weeks.

In the week ahead, bonds will be forced to abandon the current consolidation range simply because they're running out of room to continue trading a narrowing pattern (yellow lines below).  One of the nearest pivot points should be able to see some action (a bounce or a break) as a result--perhaps even earlier on in the week.  

20190930open

On any given month, there is one week of data that typically has several of the most important economic reports.  That's this week!  Friday's jobs report is always the anchor in these weeks, but in this case, the labor market is one of the least debated corners of the economy.  It's biggest potential reaction is reserved for a surprise drop in the payroll count, and failing that, it might not have much of an impact.  The ISM reports on Tuesday and Thursday, however, are big business.  This is especially true of Tuesday's Manufacturing PMI as it coincides with the first day of trading for a new month.  On that note, there is heightened volatility potential for today, specifically, centered on the 3pm CME close (read more about month-end trading considerations).


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
101-12 : -0-01
Treasuries
10 YR
1.6960 : +0.0230
Pricing as of 9/30/19 9:50AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Sep 30
9:45 Chicago PMI * Sep 50.2 50.4
Tuesday, Oct 01
10:00 ISM Manufacturing PMI * Sep 50.1 49.1
10:00 Construction spending (%) Aug 0.4 0.1
Wednesday, Oct 02
7:00 MBA Purchase Index w/e 261.4
7:00 Mortgage Refinance Index w/e 1928.0
8:15 ADP National Employment (k)* Sep 140 195
9:45 ISM-New York index Sep 879.0
Thursday, Oct 03
7:30 Challenger layoffs (k) Sep 53.480
8:30 Jobless Claims (k) w/e 215 213
10:00 ISM N-Mfg PMI * Sep 55.1 56.4
10:00 Factory orders mm (%) Aug -0.2 1.4
Friday, Oct 04
8:30 Non-farm payrolls (k)* Sep 145 130
8:30 Unemployment rate mm (%)* Sep 3.7 3.7
8:30 Average earnings mm (%) Sep 0.3 0.4