The simple concept of timing is often underappreciated as a market mover.  For instance, 820am and 3pm ET can often be sources of volatility simply because they are the opening and closing bells for Treasuries on any given day.  The same can be true for end/beginning of a week/month/quarter/year.  As such, the end of Q2 brought some risk, especially considering that both June and Q2 were good time frames for bonds. The following chart shows quarterly trends (red = bad, green = good, white = neutral).

20210701 open.png

But the new month/quarter have started off uneventfully so far.  If drama was guaranteed to accompany the calendar shift, we'd likely already know it by now.  Either that, or traders are waiting for tomorrow's jobs report or the passing of the upcoming 3-day weekend before going all-in on their July/Q3 trading goals. Indeed, one of the biggest unknowns in the analytical community is the extent to which we'll see the typical summertime trading apathy this year.  On one hand, it makes sense to fry bigger fish in the fall when the Fed has already communicated it will be reading more into the economic data compared to the next 2-3 months.

On the other hand, it could also make sense to try to read the tea leaves based on the data we have between now and then.  On that note, tomorrow's NFP is the most relevant data on any given month (even if today's 21-year low in the Challenger Job-Cut Report is an impressive feat).

20210701 open2.png


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
100-31 : -0-01
Treasuries
10 YR
1.4590 : +0.0150
Pricing as of 7/1/21 9:36AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, Jul 01
7:30 Challenger layoffs (k) Jun 24.586
8:30 Jobless Claims (k) w/e 390 411
8:30 Continued Claims (ml) w/e 3.382 3.390
10:00 ISM Manufacturing PMI * Jun 61.0 61.2
10:00 Construction spending (%) May 0.4 0.2