1/7/10

Good morning. Ahead of tomorrow’s unemployment data we had yesterday’s ADP Employment Report (which showed that the private sector dropped 84,000 jobs in December, ADP’s 23rd month in a row of declines – “employment losses are now rapidly diminishing”) and today’s weekly Jobless Claims data. Today’s number showed that the number of U.S. workers filing new applications for unemployment insurance rose less than expected last and the 4-week moving average hit a 16-month low. Yesterday’s jobs data, however, was enough to push rates higher during the day, resulting in several investors changing prices. Ahead of us we still have the supply announcement for next week’s auction of 3's, 10's, 30's and 10yr TIPS, but for now mortgage rates are worse between .125 and .250.