For a day that sits adjacent to NFP Friday, today was calm and uneventful. Bond markets started out right in line with Friday’s latest levels and improved just slightly by the end of the day (but without breaking through Friday’s best levels).
This may be more a factor of the day of the week than anything. During the summertime, Mondays can be easily picked out on chart, for the most part. They’re generally the lowest-volume days compared to their adjacent peers. There are exceptions, but they tend to have compelling explanations in tradeflows or surprise events.
As such, there’s little to be gleaned on a day that not only boasts limited participation, but that also doesn’t challenge any technical barriers. In other words–and this is really unfortunate, given the promise that last week exhibited–we’re still waiting for the other shoe to drop with respect to the rate range. 10yr yields are still stuck between mid 2.4’s and 2.66. Fannie 3.5s are still stuck between 101-20 and 102-20.