Bond markets sold off absolutely as much as they could have today while still technically staying inside the longer-term “sideways” range leading up to NFP Friday. Moderate amounts of weakness were seen overnight and after the ADP data in the morning as well as Factory Orders. As we sometimes discuss, it’s not uncommon to see a “lead-off” ahead of the NFP release, but we’re not even there yet.
This chart of 10yr yields is actually a good analog for mortgage rates as both are on the doorstep of slightly higher levels from early January. It’s entirely possible that tomorrow’s events could officially cause the “lead-off” (i.e. a break above this longer-term sideways range) or simply suggest that yields head back to more central territory before Friday morning’s data.