Heading into the weekend, the delta variant continued driving a surge in U.S. covid case counts with Friday's 118k+ being the highest day-over-day increase since February 5th.  Officials expect the surge to continue into mid-August.  After that, everyone would like to know how the return to school will change things in September.  One of the key players in the "would like to know" camp is our own Federal Reserve, who is very much in the process of refining their policy outlook based on the case count situation and associated economic response. 

A new Fed policy announcement will be released Wednesday afternoon, and while it won't contain an official update, it could expose a potential shift in the Fed's line of thinking (or lack thereof).  Will the Fed ramp up its stated level of concern over rising covid case counts? Will they acknowledge a softening in the data or an undershooting of the substantial recovery goals?  Either way, the clarification could be worth something to bonds.

In the meantime, Treasuries begin the week trying to maintain the bullish pivot that took place over the past 3 weeks (with July 6th through the 16th marking failed attempts to move below 1.295% and the entirety of last week spent mostly under that level in terms of 10yr yields).  With yields rising up to 1.28% this morning after some overnight strength, it's too soon to say.

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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
101-23 : +0-01
Treasuries
10 YR
1.2780 : -0.0070
Pricing as of 7/26/21 10:05AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Jul 26
10:00 New Home Sales (ml) Jun 0.800 0.769
10:00 New Home Sales (%) (%)* Jun 3.0 -5.9
13:00 2-Yr Note Auction (bl) 60
Tuesday, Jul 27
8:30 Core CapEx (%)* Jun 0.7 0.1
8:30 Durable goods (%)* Jun 2.1 2.3
9:00 Monthly Home Price yy (%) May 15.7
9:00 Monthly Home Price mm (%) May 1.8
9:00 CaseShiller 20 yy (% ) May 16.4 14.9
10:00 Consumer confidence * Jul 123.9 127.3
13:00 5-Yr Note Auction (bl)* 61
Wednesday, Jul 28
7:00 MBA Purchase Index w/e 255.8
7:00 MBA Refi Index w/e 3267.6
14:00 FOMC rate decision (%)* N/A 0.125 0.125
Thursday, Jul 29
8:30 GDP Advance (%)* Q2 8.6 6.4
8:30 Continued Claims (ml) w/e 3.196 3.236
8:30 Jobless Claims (k) w/e 380 419
10:00 Pending Sales Index Jun 114.7
10:00 Pending Home Sales (%) Jun 0.3 8.0
13:00 7-Yr Note Auction (bl)* 62
Friday, Jul 30
8:30 Core PCE Inflation (y/y) (%)* Jun 3.7 3.4
9:45 Chicago PMI * Jul 64.6 66.1
10:00 Consumer Sentiment (ip) Jul 80.8 80.8
10:00 Sentiment: 1y Inflation (%) Jul 4.8
10:00 Sentiment: 5y Inflation (%) Jul 2.9