Q3 opens with bonds retreating: the 10-year Treasury yield rose to 4.401% (+2.6 bps) and UMBS 5.0 slipped 18 ticks to 98.46. The 30-year conventional rate holds at 6.52% for now.

Bond pressure is pointing slightly higher if today's softness holds through the close.

The quarter-end tailwind is gone. The mechanical buying that helped bonds rally last week — institutional rebalancing into fixed income before Q2 closed — ended with yesterday's close. That support doesn't carry into Q3. What's left now is economic data, and there's a lot of it packed into a short week: ADP private payrolls tomorrow and the June jobs report Thursday on a shortened session ahead of the July 4th holiday. Last week's core PCE reading — 3.4% in May, running above target — gave the Fed no cover to move rates lower. Bonds are absorbing that.

For borrowers, 6.52% is still the rate. If you locked at 7% or higher in 2023 or early 2024, the monthly payment difference on a $400,000 loan is around $126 — real savings over a 3+ year time horizon. But today's drift in yields is a reminder that this window doesn't hold open on its own. The jobs report Thursday is the next pivot point: a soft print extends the rally; a stronger number puts pressure back on rates.

Thursday's jobs report lands on a half-session day with thin trading volume before the July 4th long weekend. That combination tends to amplify price moves in either direction. If you've been waiting for a signal, that report is it.

— David Burson, NetRate Mortgage