ADP Comes in at Expectations

The bond market is again down slightly in early morning trading, as investors prepare for the Federal Reserve to make their interest rate and policy decision at noon MST.  It isn’t expected that the Fed will raise interest rates today. However, investors will likely be cautious ahead of the announcement, so we can anticipate bond markets to have a lackluster morning. Further, Friday’s Bureau of Labor Statistics’ (BLS) Jobs Report is also a potential market moving event that will keep many on the sidelines ahead of time.

This morning we received ADP’s estimate of new job creations for the month of April. While the market anticipated 200,000 new hires, the actual report came in at a very close 204,000. This is good news for the mortgage market as it reduces the likelihood of seeing a super high figure from the BLS. However, there has been a discrepancy between the two reports lately. Since the BLS showed a pathetically low figure in March, we still feel the odds of a stronger than expected BLS Report is high.

Since market makers will likely hold off on placing significant bets ahead of the pending reports, we will maintain our locking bias.