Bonds recover into the close — UMBS 5.0 finishes at 98.89, up 25 ticks on the day; 30yr conventional ends the week at 6.42%.

The arc for Friday followed a three-act pattern the week had rehearsed before: open strong on the data, drift through midday, recover into the close. April payrolls at 115,000 and unemployment rising to 4.3% gave bond buyers the morning catalyst. MBS gave back ground through midday — UMBS 5.0 slipped to 98.80 by noon — then buyers returned in the afternoon, pushing the benchmark coupon to 98.89 by the close, up 25 ticks from Thursday's 98.65. The 10-year Treasury yield finished at 4.355%, down 3.6 basis points on the day, reversing Thursday afternoon's post-FOMC climb.

What held up in the afternoon was the soft labor print's staying power. A jobs number that comes in 40,000 below consensus doesn't fade as quickly as a geopolitical headline. The unemployment rate at 4.3% is a concrete data point the Fed has to weigh, and the market knows it. With the FOMC now on hold and the next rate decision weeks away, incoming data is the only game in town. A soft jobs print on a Friday carries through to Monday's open unless something interrupts it over the weekend.

For borrowers, 6.42% is the number that closes the week. It's 2 basis points lower than Thursday's open and flat to where Monday started — a full week of FOMC and jobs volatility that netted out to approximately nothing on rate sheets. The refi math at 6.42% still works for anyone locked at 7.0% or higher with a 3-year-plus horizon. Next week's calendar is lighter; absent a surprise, bonds should trade in a narrower range.

— David Burson, NetRate Mortgage