Bonds managed to consolidate by the end of last week after yields surged to the highest levels since June.  They're now faced with the choice to acquiesce to the new, higher range or push back toward the previous range.  At the risk of stating the obvious, unless covid numbers and economic data deteriorate, it's hard to make a case for a quick return to the previous range.  As such, the more relevant question is whether the new trend will be more sideways or directional.  Friday's jobs report likely has a big say in that regard.  Today's trading is casting more of a sideways vote so far with yields up only slightly from Friday afternoon's lows.

That said, anything other than a rally means that today casts a vote to remain in the new, higher range achieved last week.

20211004 open2.png

If we zoom in on the chart above (note: the candlesticks below are hourly as opposed to daily) and adjust the pivot points just a bit, we can see this morning's trading clearly rejecting the idea of trying to re-enter the previous range.  Bottom line, while we may not be surging back up to last week's highs, we're still confirming the new, higher range.

20211004 open1.png

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
UMBS 2.5
103-09 : -0-05
10 YR
1.5050 : +0.0380
Pricing as of 10/4/21 9:57AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Oct 04
10:00 Factory orders mm (%) Aug 1.0 0.4
Tuesday, Oct 05
10:00 ISM N-Mfg Bus Act * Sep 59.5 60.1
10:00 ISM N-Mfg PMI * Sep 60.0 61.7
Wednesday, Oct 06
7:00 MBA Purchase Index w/e 280.4
7:00 MBA Refi Index w/e 3359.5
8:15 ADP National Employment (k)* Sep 428 374
Thursday, Oct 07
8:30 Jobless Claims (k) w/e 348 362
8:30 Continued Claims (ml) w/e 2.780 2.802
Friday, Oct 08
8:30 Non-farm payrolls (k)* Sep 488 235
8:30 Unemployment rate mm (%)* Sep 5.1 5.2