Monday Market Commentary: Jobs Report May Move Rates

by Alex Stenback on December 3, 2007

Rates_123
                                                                 Graphic Via MSNBC
Last Week
Inflation, at least according to last week’s PCE/GDP data remains in check, which when combined with the foregone-conclusion of a Fed rate cut this month, sent rates to their lowest levels in almost two years.  Most 30 year fixed now trading at about 6.1%.
This Week
Friday’s November jobs report looms large on the calendar.  The low unemployment rate and the fact that the economy continues to add jobs has been, in our opinion, a big reason that interest rates remain above 6%.  The markets expect about 75k jobs created – also keep one eye on prior months revisions to the jobs numbers – a number significantly below that could move rates down, while a large "beat" could move them up.    Technical factors show mortgage bonds oversold, so an upward move in rates is the path of least resistance if the numbers don’t surprise in either direction.
This Week’s Economic Calendar [Barron's]

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