Bonds sold off through the session Tuesday: UMBS 5.0 closed at 97.79, down more than half a point, with the 10-year Treasury up 8 basis points to 4.55% and the 30-year conventional rate settling at 6.63%.

What started as quiet summer drift turned into a genuine sell-off by the close. UMBS 5.0 finished at 97.79, down more than half a point on the day and well below the 98.09 open. The 10-year Treasury climbed 8 basis points to 4.552%, and the 30-year conventional rate settled at 6.63% — up 4 basis points from where it opened the week.

An 8-basis-point move on the 10-year is more than noise. Bonds gave back the balance of last week's jobs-report gains and then some, with the selling picking up steam into the afternoon rather than fading. There was no scheduled data to explain it — the calendar was empty — so this was a market repricing on its own, not a reaction to a fresh number. When a move builds through the session on light volume and no catalyst, it usually reflects positioning rather than a real change in the outlook, but the direction was one-sided all day and worth respecting.

For borrowers, 6.63% is where the market closed, and it's still meaningfully below the 7%+ rates most people locked through 2023 and 2024. But the two-day trend is now clearly higher, and Thursday's weekly jobless claims is the first hard data that can turn it. A print above 220,000 would reinforce June's labor-market weakness and likely pull bonds back; below 200,000 would put last week's 57,000 payroll miss in doubt and could extend this week's pressure. Nothing between now and then is likely to move rates in a meaningful way.

— David Burson, NetRate Mortgage