The much anticipated December Non-Farm Payroll report was released this morning. Investors were expecting it to continue the trend of improved economic data. Specifically, payrolls were projected to be unchanged in December after falling every month since January of 2008 (23 consecutive months).
This release is dwarfed by tomorrow’s jobs data. Investors will likely spend the day squaring up positions in front of tomorrow’s payrolls report.
This morning’s release of the MBA Mortgage Applications index showed that applications improved slightly by 0.5% last week. Also, the market will be closely reviewing the 2PM release of the FOMC meeting minutes to garner any information on future policy changes.
Treasury and mortgage bond prices are higher this morning ahead of this year’s first bit of U.S. housing data. It comes in the form of November Pending Home Sales, which are expected to decrease 2.0% month over month.
According to Reuters, Chairman Ben Bernanke gave a speech last Sunday defending the Fed’s low rates.
The ISM Index finished off on a high note today at 55.9, which is significantly higher than November’s 53.6. Readings above 50 indicate economic expansion.
Fewer folks filed claims for unemployment benefits last week. The number of unemployment claims dropped by 22,000 down to 432,000.
As we wind into the New Year, today is the last full trading day of 2009. The Treasury will complete its $118 billion weekly auction package with today’s $32 billion in 7-year notes at 1 P.M.
This afternoon, the Treasury will continue their weekly auction activity with the sale of $42 billion 5-year notes. There is some concern in the market that demand could be muted at today’s auction, especially following yesterday’s disappointing 2-year sale.
Treasuries and mortgage bonds are falling this morning on speculation that the U.S. recovery will fuel inflation, reducing demand for debt at this week’s government auctions.