Stocks are lower and Mortgage Bonds are trading near unchanged levels so far this morning. It’s a quiet news week, but Wednesday we will receive MBA Purchase Applications and a 10-year Treasury Note Auction, Thursday brings Retail Sales, Jobless Claims and a 30-year Treasury Bond Auction, and Friday the Producer Price Index will be released.
Last Friday the Bureau of Labor Statistics reported that there were 175k jobs created in the month of February. When we take a deeper look into the numbers, the bulk of the gain was from people ages 55-64. These are probably people who can’t afford to retire and are looking to augment income. Additionally, most jobs were created for people with education below a bachelor’s degree. The segment of individuals who had a bachelor’s degree and above actually saw a loss of almost 250k jobs. This means that there were 425k jobs created in what might be considered part time or lower paying jobs.
In the absence of news, technicals will dictate market direction. Mortgage Bonds are being squeezed in a tight range. There is a triple layer of support for the bonds. There is overhead resistance at the 100-day Moving Average. Something’s got to give and prices have to breakout one way or another. We can begin the day carefully floating to see if Bonds can breakout to the upside.