Bonds closed Wednesday at the best levels of the session, with the 10-year back to 4.780% and MBS higher across every coupon — though the published 30-year average still ticked up to 6.91% as Tuesday's damage worked through lender pricing.

Bonds opened firm and stayed firm. MBS were up three ticks by 8:36 AM ET, drifted back to roughly flat through the early afternoon, then rallied into the bell to finish at the day's highs. The UMBS 6.0 closed at 100.99, up 9 basis points; the 5.5 closed at 98.80, up 13. The 10-year Treasury settled at 4.780%, down 1.3 basis points, with the whole curve lower and the short end leading — the 2-year finished at 4.372%, down 2.9.

August ADP landed at 8:15 AM ET and missed: 38,000 private jobs against a 47,000 forecast, with 46,000 the month before. The bid showed up right behind it. Just as important was what didn't happen — no fresh war headlines, and oil sat still after Monday's run. That combination was enough to repair a piece of Tuesday's selloff, not to reverse the direction. Yields still touched their highest intraday levels in over a year today; they just did it inside a two-basis-point range.

Worth being precise about what improved. Bond prices went up today. The published 30-year average went up too, to 6.91%, because rate sheets are still absorbing Tuesday — better MBS prices today are what relieves pressure on tomorrow's pricing, not today's. And that average assumes an ideal scenario that accounts for upfront costs; plenty of borrowers are being quoted 7% or higher right now. Jobless claims land Thursday at 8:30 AM ET and the August employment report Friday morning. One quiet session doesn't turn a trend — those two prints are what would.

— David Burson, NetRate Mortgage