What Happened Last Week?
Perfectly Logical Reaction to On-Target Data
It’s not necessarily a fun fact to face, but Friday’s bond market sell-off was a perfectly logical reaction to the modest beat in NFP. But wait, what about the negative revisions?! Yes, it’s still a logical reaction. The short version reason for this is as follows: Wednesday’s rally was largely about Wednesday’s data carrying anecdotal implications for Friday’s jobs report. When Friday’s jobs report didn’t deliver the goods, the rally was erased. Revisions didn’t matter because last month’s NFP was a big beat in and of itself and only revised to levels that were still higher than Friday’s headline. Bottom line: NFP looks sideways at decent levels–not at all worthy of the concern suggested by Wednesday’s reports and other generally weaker data over the week.
Source: Matthew Graham, Mortgage News Daily 6/6/2025)
What’s on the Agenda for This Week?
Three Things
The three areas that have the greatest ability to impact MBS backend pricing this week are: (1) Geopolitical, (2) Inflation Nation and (3) Treasury Dump.
(1) Geopolitical: This category will continue to dominate the long end of the yield curve. This week will be China/US trade talks in London, unrest in California, the Big Beautiful Bill, and continued tariff news.
(2) Inflation Nation: Both CPI and PPI will be this week with the focus on CPI.
(3) Treasury Dump: Thursday’s 30-year bond auction is the most important for pricing.
- 06/10: 3-year note
- 06/11: 10-year note
- 06/12: 30-year bond
On Deck for Tomorrow
NFIB Small Business Optimism Index, 3-year Treasury Note auction.