MBS up 6 bps to start the week.

Stocks flat Bonds began the overnight session drifting sideways to slightly weaker, but without much volatility. The 8:20am CME open brought in a mini surge of buyers and that momentum continued through 9am. MBS are up 6 bps, but up almost a quarter point from the AM lows.

Crude prices jumped as Saudi Arabia’s state-run news agency said the country will prolong its unilateral oil production cut by one month, keeping a lid on supply even as the market is expected to tighten. Its OPEC+ ally Russia also announced fresh curbs on exports.

Wednesday we get Fed Minutes. Thu is Jobless Claims, EDP Employment, JOLTS. Friday is BLS jobs. Jobs are about the only thing that can move the markets at this point.

The outlook hasn’t changed, we saw rates move higher on the first wave of realization that the Fed will continue to raise rates this year beyond the July meeting, but there is still a lot of room to move higher as markets grow more certain that we will get at least two more rate hikes this year. The only thing that can stop it is if we see some major weakness in the labor data later this week, and I’m not willing to gamble on that.

Monday brings a courtesy trading day for bond market participants.  Those who want/need to trade can do so while those who wanted the 4 day weekend don’t need to stress too much about taking it.  ISM Manufacturing is the only big ticket econ data and it garnered a bit less than half the volume seen in response to last Thursday’s AM data. Unless something unexpectedly significant happens, the day is over as soon as it began and the opening commentary is also the closing commentary.

MBS closed down 30 bps.  Stocks pretty much flat.

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