Thursday kicked off with several potential bond market threats.  Asian markets fired up again after a week of holidays.  The influx of volume could easily have tipped the scales but bonds stayed steady.  The Bank of England tapered its bond buying program, which sounds scary at first, but was widely expected.  Most recently this morning’s labor market reports were both quite a bit stronger than expected.  If bonds don’t seem too flustered by any of the above, it’s because focus remains centered on tomorrow’s big jobs report.

In terms of levels, yields continue to operate in a very interesting range despite relatively muted volatility.  The range coincides with the late January to early February range seen at the start of the pandemic.  It’s as if bonds are in the process of deciding whether or not they’re ready to move up and out of the post-pandemic range or remain inside.  Tomorrow’s jobs report could cast a big vote on the decision, if it’s significantly stronger or weaker than expected.

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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 2.5

103-28 : -0-01

Treasuries

10 YR

1.5640 : -0.0200

Pricing as of 5/6/21 10:13AMEST

Tomorrow’s Economic Calendar

Time Event Period Forecast Prior
Thursday, May 06
7:30 Challenger layoffs (k) Apr 30.603
8:30 Labor Costs Preliminary (%) Q1 -0.8 6.0
8:30 Productivity Preliminary (%) Q1 4.3 -4.2
8:30 Jobless Claims (k) w/e 540 553
8:30 Continued Claims (ml) w/e 3.620 3.660

By Matthew Graham , dated 2021-05-06 10:13:21

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Courtesy of Mortgage News Daily

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