Good Afternoon,
Mortgage Bonds were up this morning after grim employment news was released. According to the Labor Department, 467,000 jobs were lost in June, which is far worse than expectations of 365,000. In addition, the unemployment rate rose to 9.5%, its highest level since August 1983. Overall, the weak Job numbers indicate that the recession continues at concerning levels.
In other news, the European Central Bank held its benchmark interest steady at 1% to help stimulate the European economy. As a result, the US Dollar has strengthened significantly, which has caused a sharp decline in Oil prices today. The decline in Oil, in turn, is applying pressure to Stocks by pushing shares of energy lower.
Currently, the weak job news has helped Mortgage Bonds climb to test a dual layer of resistance. I recommend floating for now, but be prepared to lock in the gains if Bonds are pushed lower. Remember, the markets will be closed tomorrow in observance of Independence Day. Have a safe and happy holiday!
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