Particularly Calm Before a Particularly Important NFP
The widest trading range of the week has been 4.5bps (Tuesday), but tomorrow's jobs report could easily result in twice as much movement, or even three times as much. Based on the relevant technical levels, that means bonds closed in the most neutral position possible (1.30% in 10yr yields leaves an equal amount of distance to the top and bottom of the 4-week range). With that level already marking the close for yesterday, traders didn't need to do much today--a fact that's evident in the week's smallest trading range and lowest volume profile.
Fed MBS Buying 10am, 1130am, 1pm
Jobless Claims 340k vs 345k f'cast, 354k prev
Flat in Asia, then stronger in Europe, led by European bonds. No major reaction to AM data. 10yr down 1bp at 1.29% and MBS up 1 tick.
Modest weakness in the 10am hour with yields cresting 1.30% briefly. Sideways to slightly stronger since then. Lower volume and lower volatility vs yesterday. MBS up 1 tick (0.03) at 101-11 (101.34).
Bonds hit the 3pm close with the sideways vibe easily intact. Levels are unchanged from the last update.