There is so much on tap today per hour of open market time.  It may be some sort of record.  Not on the economic calendar below, but still potentially significant is the European Central Bank Announcement at 7:45am.  Then Draghi returns to complicate the post-NFP trading with a press conference that begins at 8:30am (same time as NFP and several other pieces of data), but doesn't begin taking questions for usually 10-15 minutes.

While there is other data in the 8:30am time slot, the focus is--of course--on NFP.  As we discussed on MBS Live yesterday and in the MBS Recap, June's employment metrics in other pieces of economic data have been almost exclusively stronger than the previous month.  Given that today's forecast calls for a drop from the previous month in both nonfarm payrolls and private payrolls, it doesn't strain credulity to assume markets are prepared for a bit of a stronger number.

If anything argues the opposite case effectively, it's that the June release historically misses  the forecast, and by quite a bit.  When it comes to NFP, anything can happen though, so it's best not to plan on a particular outcome or even an "if/then" reaction ahead of time and simply enjoy the show.  At stake today, is the potential for the recent weakness to extend even more. 

Technical indicators have been unanimously negative.  That much should be clear simply because the past several sessions have seen a bottoming-out and reversal.  Perhaps less clear is that there's room-to-run from that technical standpoint, with 2.66% being the most compelling overhead target. 

As far as NFP days go, that wouldn't be much movement, and the next zone likely to bring in more supportive buying wouldn't be reached until 10's were over 2.70%, and that would put MBS nearly a point lower from Thursday's close (this isn't to say we would get there in a day, simply that a big, negative move following NFP would be akin to setting the GPS for that zone, arriving some time in the next few days, notwithstanding any significant bumps or detours).