Morning Preview .............. 7:51 AM EST

Today's the day for a bounce back on MBS prices.  That's more of a hope than a promise.

We have the always impactful employment situation on tap for today (coming up in about half an hour), and consumer credit at 2pm.  Here are the estimates for the day:

• Payrolls estimated at 35k  (we'll also get revisions to January's read of -17k)
• Unemp. Rate est. at 5.0%
• Avg. hrly earnings est at .2% increase m/m
• Work week hrs est at  33.7
• Consumer Credit est at 6.0 bn

Traders are hedging their positions prior to what many think will be a worse than expected employment report.  MBS have traded 8-9 /32nds better this morning, recouping some of the losses from yesterday afternoon.  Spreads between MBS and the 10 year have finally decelerate from yesterdays race in opposite directions with the 10 year still the prettiest girl at the party but only up 19/32nds so far.  MBS shot up in pre-open trading and on their way back down, paused to recognize the floor they so disrespectfully crashed through yesterday at 98-06/32nds.  They then have failed to break through this floor this morning and have been bouncing right on top of it for nearly an hour.  If that floor holds and employment is weak, we could rally today.

So hopefully, the MBS indigestion from yesterday will have passed and we'll have some buyers today for the "bargain" now represented for those with enough risk tolerance to throw their chips in the mortgage pile.  With the 10 year and MBS turning their backs to each other and running as far as possible in opposite directions, the door is open for a technical correction provided we don't get hit today with more nauseating news for MBS collateral. 

I'll be seeing you soon after 8:30 Eastern with a recap of employment data and analysis.  Keep your fingers crossed!