Market commentary
The much anticipated release of employment figures came in stronger than expected this morning with slightly better numbers for August with notable revisions to June and July. The headline change in non-farm payrolls showed a loss of 54k jobs in August but a gain of 67k private payrolls. The headline drop still reflects the loss of temporarily hired census workers. June and July were collectively revised from a 351k loss to a 229k loss. Average hourly earnings were 0.3% higher and the average weekly hours were unchanged at 34.2.
The bond market immediately sold off on the higher than expected gain in private payrolls. The yield on the 10 year note spiked from 2.63% to 2.74% and mortgage bonds worsened in price over .50%. The markets have calmed slightly since the data, with the yield on the 10 year note falling back to 2.71% and mortgage bonds worse by .25% to .375%. Keep in mind many senior staff on the trading desks are on vacation in front of the Labor Day Holiday and volume is light.
Next week is light in terms of economic data; however, the U.S. Treasury will be auctioning 3yr and 10 yr notes and 30 yr bonds.
Enjoy you long, three day weekend!
