If bonds needed an excuse to move up and out of their lowest range since February, last week's jobs report provided enough of an opportunity for sellers to test the waters.  The fact that we're seeing modest gains at the start of the new week means the decision has not yet been made.  Data will provide a bit of guidance.  Any outsized strength or weakness in the Treasury auction cycle will provide a bit more.

When it comes to data, the calendar is limited, with CPI being the only bigger ticket event (core, y/y seen at 4.3% vs 4.5% previously).  That'll be out on Wednesday morning with the week's most important Treasury auction (10yr) following that afternoon.  If bonds haven't tried to stage a big break above 1.30% by then, it would speak to a certain open-mindedness about the effect of last week's jobs report on the Fed's tapering timeline.  There are several weeks to go until getting more official clarification from Powell at Jackson Hole.

In the meantime, we'll need to decide how much we care about individual technical levels versus a general sense of momentum.  While it's useful to call out specific technical levels for analytical purposes, they're not magic.  We can forgive a bit of a break above 1.30% if yields are still mostly grinding sideways, and especially if we're avoiding any inexplicable snowball selling sprees.  A slightly larger range could even include something around 1.44--recently a very relevant pivot point--while still sending broadly "sideways" messages.

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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.
UMBS 2.0
101-15 : +0-03
10 YR
1.2900 : +0.0020
Pricing as of 8/9/21 10:33AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Tuesday, Aug 10
13:00 3-Yr Note Auction (bl) 58
Wednesday, Aug 11
0:00 Roll Date - UMBS 30YR
7:00 MBA Purchase Index w/e 247.5
7:00 MBA Refi Index w/e 3571.3
8:30 Core CPI (Annual) (%)* Jul 4.3 4.5
8:30 Consumer Price Index (CPI) (%)* Jul 0.5 0.9
13:00 10-yr Note Auction (bl)* 41
Thursday, Aug 12
8:30 Core Producer Prices YY (%)* Jul 5.6 5.6
8:30 Jobless Claims (k) w/e 375 385
13:00 30-Yr Bond Auction (bl) 27
Friday, Aug 13
8:30 Import prices mm (%) Jul 0.6 1.0
8:30 Export prices mm (%) Jul 0.8 1.2
10:00 5yr Inflation Outlook (%) Aug 2.8
10:00 1yr Inflation Outlook (%) Aug 4.7
10:00 Consumer Sentiment Aug 81.2 81.2