The bond market awaits the nonfarm payroll report and Supreme Court ruling, while the widening MBS spreads reflect cautious sentiment.

⑴ On Monday, the US Treasury market exhibited a slight bearish flattening trend, MBS spreads widened under pressure, and global stock markets edged higher against the backdrop of a rebound in oil prices. However, investors overall maintained a wait-and-see attitude, with focus concentrated on key event risks midweek. ⑵ A busy schedule is ahead this week. On Wednesday, Federal Reserve Chair Waller will speak at the ECB Forum, and Thursday will see the release of the June nonfarm payrolls report. Institutions expect 110,000 new jobs, down from the previous 172,000, with the unemployment rate projected to remain steady at 4.3%, and average hourly earnings growth potentially rising to 3.5% year-on-year. ⑶ In terms of geopolitics, after mutual strikes over the weekend, the US and Iran have paused hostilities and begun negotiations, but the situation remains uncertain. WTI crude rebounded above $70, and fluctuations in energy prices continue to disrupt the inflation outlook. ⑷ The Supreme Court will also rule this week on the eligibility of Federal Reserve Governor Cook. Should the outcome be unfavorable, it could further affect the policy stance distribution within the Fed, increasing uncertainty regarding the direction of monetary policy. ⑸ Currently, the 2-year/10-year Treasury yield spread is about 27 basis points, the 10-year yield trades narrowly around 4.37%, and market volatility has slightly risen, indicating traders are inclined to reduce exposure before the employment data release. Meanwhile, SIFMA has recommended early market closure on Thursday in anticipation of liquidity tightening ahead of the holiday.