Floating Bias

The big report is out!  The Jobs figure came in at 162,000, which was below the 175,000 target.  The Unemployment Rate fell from 7.6% to 7.4% as well, but it appears that most investors have put that figure in context due to all the attention regarding the increase of part time jobs.  Stocks responded with a drop initially, but have since come back to even.  Investors are interpreting this report as full steam ahead with Quantitative Easing.  mortgage bond investors look to have the same view, as bonds have gained back all their losses from yesterday’s drop.  The bottom line take away is…  this was not a great report. mortgage bonds are now back to the top of their price channel, which is giving interest a shot at improving.  We will take a floating bias and give bonds a chance to break higher which would results in rates ratcheting down a notch.

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