Bonds rallied quickly in response to this morning's jobs report and pressed to even stronger levels by mid-day. That's the point in the day that most traders (the ones actually working) consider bonds to be "closed." You're free to do the same and count today as a win. But in the noon-2pm hour, a decent chunk of the AM gains were erased. We wouldn't read too much into those and instead view them as a facet of pre-holiday-weekend illiquidity and/or position squaring. This doesn't imply directionality in the future. It just means we have to wait for next week to get a clean read on market sentiment.
Weaker overnight with 10yr up 2bps at 4.502 and MBS down an eighth.
08:31 AM
Moving back into positive territory after jobs report. MB now unchanged and 10yr down 1bp at 4.47
12:16 PM
MBS up 5 ticks (.16) and 10yr down 1.2bps at 4.469
01:48 PM
weakest post-data levels with 10yr up 1bp at 4.49 and MBS now unchanged.
Lock / Float Considerations
7/2/26 - The jobs report was constructive for rates in the bigger picture. We'd hesitate to read too much into the afternoon back-tracking on the half-day before a 3 day weekend. Risk-tolerant folks are hoping recent ceilings hold over the weekend and can be built upon in the coming week. In general though, caution remains warranted due to the lack of follow-through after the recent attempt to hold below 4.42% (10yr yield).
