The presidential election happened 2 months ago and since then, bonds really haven't moved other than in response to the Pfizer vaccine news on Nov 9th and stimulus news on Dec 1st.  Both of those sell-offs took 10yr yields to similar ceilings.  Both were under 1.00%.  It's entirely possible (if not probable!) that the key motivation for remaining so sideways during that time is that the Georgia senate run-off elections are still TBD.  At stake: the balance of power in the US government. 

Full control by one political party is something the bond market typically cares very deeply about (as seen in late 2016 when the election precipitated the biggest month of bond market losses since 2003).

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Later this week (Wed night, at the earliest), markets will finally learn whether or not democrats will control the senate.  To be clear, this isn't about democrats or republicans.  It's about control.  When one party has control, it's much easier for the government to spend money or cut taxes (which is just a different way of the government spending money as it has to pay more to subsidize a revenue shortfall).  Either way, Treasuries are issued to foot the bill.  Excess Treasury issuance means higher yields and upward pressure on mortgage rates.

Covid is still a consideration.  The longer it takes for vaccines to roll out and the more economic damage sustained in the near term, the better for rates.  On the other hand, if the economy is muddling through the winter months without too much drama and if vaccine production looks more promising, we could be staring down a very big double whammy for rates.  


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
UMBS 2.0
103-27 : -0-02
Treasuries
10 YR
0.9450 : +0.0330
Pricing as of 1/4/21 9:12AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Jan 04
10:00 Construction spending (%) Nov 1.0 1.3
Tuesday, Jan 05
10:00 ISM Mfg Prices Paid Dec 65.7 65.4
10:00 ISM Manufacturing PMI * Dec 56.6 57.5
Wednesday, Jan 06
7:00 MBA Purchase Index w/e 316.3
7:00 MBA Refi Index w/e 4169.0
8:15 ADP National Employment (k)* Dec 88 307
10:00 Factory orders mm (%) Nov 0.7 1.0
Thursday, Jan 07
8:30 International trade mm $ (bl) Nov -65.2 -63.1
8:30 Jobless Claims (k) w/e 800 787
10:00 ISM N-Mfg Bus Act * Dec 55.0 58.0
10:00 ISM N-Mfg PMI * Dec 54.6 55.9
Friday, Jan 08
8:30 Non-farm payrolls (k)* Dec 100 245
8:30 Unemployment rate mm (%)* Dec 6.7 6.7
10:00 Wholesale inventories mm (%) Nov -0.1 -0.1