7/2/10

Most rates prices are unchanged with yesterday as mortgage bonds hold onto Thursday’s levels after some earlier volatility. Bonds were improved after the initial jobs report was released, then turned negative, but have since recovered to near unchanged. Expect some more choppiness as the holiday weekend close approaches and Wall Street heads for the Hamptons. The jobs data was weak not just in the pure employment number but also in the reduction of the labor force as many simply give up—a troubling sign and asterisk to the “false” lower unemployment rate (1.2 million workers have given up and don’t count as “unemployed”). The bond market is trading at “crisis” levels and seems like it wants to sell off despite the poor data. And though we have fears of a double dip and sovereign debt issues, we’re not in the day Lehman failed mode. A sell off could happen at any time. No fireworks today folks as the big jobs report yields a level day so far for interest rates. So far… Have a safe and happy Fourth