Today’s January Jobs Report was lackluster at best showing that employers added just 113K jobs, below the 175K expected. The weak data did manage to push Mortgage Bond prices higher, but the gains are modest.
Mortgage Bond prices continue to battle key overhead resistance levels and until they can break above that ceiling, I will continue to recommend a locking stance.
10-Year note yields fell for the first time in four days following today’s rather disappointing payroll data (-4 bps). Nonfarm Payrolls missed forecasts by -67K coming in at +113K vs. +74K prior; expectations were for a +180K boost. Private payrolls advanced +142K vs. +89K in December. We saw the labor force rebound +523K vs. -347K prior and the unemployment rate slipped to 6.6% from 6.7% in December. Government employment fell -29K, the biggest in a single month since October 2012. Wage growth met expectations of +0.2% after posting flat in December. Overall, the employment report points to a soft first quarter and, while it seems clear that this month’s jobs report missed the mark, there is some uncertainty over how much weather weighed on job growth. The curve has bull flattened with MBS tightening 3-4 ticks.
If anything changes, I will get back to you. Have a great weekend!
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