What a difference a day makes. Unfortunately, it’s an unpleasant difference in this case as mortgage rates went from the lowest levels in more than a week back up to the 2 year highs in less than 24 hours. This was partly due to the size of today’s rate spike, but mostly due to the fact that rates didn’t ever make it too far below 2 year highs after hitting them last week. Still, it took some motivation from underlying events. Motivation came from foreign central bank announcements–in this case, the British and European counterparts to the Federal Reserve. Both the Bank of England (BOE) and the European Central Bank (ECB) surprised the market in slightly different ways. The BOE hiked its policy rate early this morning, despite mixed forecasts. The ECB did not hike rates, but in comments following the announcement, ECB President Lagarde effectively prepped markets for a rate hike at the next policy meeting. In both cases, domestic bond markets took cues from the Eurodrama. Translation : big spikes in foreign bond yields led to medium-big spikes in domestic bond yields (aka “rates”). Tomorrow brings the monthly jobs report from the Department of Labor. This is typically a big consideration for rates, but its importance is muted by Omicron. Specifically, the labor market in January is not exactly indicative of longer-term labor market conditions. Nonetheless, financial markets have a habit of making bigger moves on the day the jobs report comes out, even if they’re not reacting to the jobs data itself. Translation : more volatility is possible tomorrow, for better or worse.