Market Analysis

Bond markets are improving this morning after a 5 day losing streak last week. Analysts are still trying to understand the impact of Friday’s surprise November Non-Farm Payroll report which showed that only 11,000 jobs were lost in November (vs expectations of 130,000 jobs lost). In addition, the Labor Dept reported that they had overstated job losses in September and October by 159,000. These lower job losses are also accompanied by higher temporary agency hiring. Temp help agencies added 52,000 jobs in November vs 40,000 in October. Tem agency hiring is considered a leading indicator for a better jobs market as companies tend to increase their reliance on temp agencies prior to adding permanent headcount.

The economic calendar is light this week. Below is a recap of this week’s economic calendar:

Monday, December 07, 2009

October Consumer Credit Outstanding – expected to drop by $8.8 billion after a $14.8 billion drop in September.

Tuesday, December 08, 2009

Treasury Dept auctions $40 billion of 3-year notes – investor demand for this auction is expected to be strong due to short duration of these notes.

Wednesday, December 09, 2009

Treasury Dept auctions $21 billion of 10-year notes – the results of this auction will be watched more closely as a gauge of continued investor appetite for longer term US debt at current rates.

Thursday, December 10, 2009

Initial jobless claims for the week ended 12/5/09 – expected up by 3,000.

Treasury Dept auctions $13 billion of 30-year bonds – the results of this auction will be also be watched very closely as a gauge of continued investor appetite for longer term US debt at current rates.

Friday, December 11, 2009

November Retail Sales – expected up .9% vs last month up 1.4%. Excluding autos expected up .5% vs last month up .2%. A strong # on this report would be expected to put upward pressure on mortgage rates.

The Reuter's/University of Michigan's Consumer sentiment index – expected up to 68.2 compared to 67.4 for November.