Unemployment Not High Enough For a Full-Fledged Rally

If the only metric from this morning’s jobs report was the uptick in unemployment from 4.4 to 4.6%, and if that was the last of this week’s big ticket econ data, it wouldn’t be a surprise to see a more aggressive rate rally. As it stands, unemployment was tempered by a higher participation rate and less dire unrounded numbers (taken together, these actually made unemployment closer to unchanged).  Add in stronger payroll growth, a surge in core retail sales, and the need to wait and see how Thursday’s CPI comes out, and the choppy, lackluster rally is easier to reconcile.

Econ Data / Events

ADP Weekly Employment

16.25k vs 4.75k prev

Non Farm Payrolls (Oct)

-105 vs — f’cast, 119K prev

Non Farm Payrolls (Nov)

64K vs 50K f’cast, — prev

Participation Rate (Nov)

62.5% vs — f’cast, 62.4% prev

Retail Sales (Oct)

0.0% vs 0.1% f’cast, 0.2% prev

Retail Sales Control Group MoM (Oct)

0.8% vs 0.4% f’cast, -0.1% prev

Unemployment rate mm (Nov)

4.6% vs 4.4% f’cast, 4.4% prev

Market Movement Recap

08:36 AM Modestly stronger after jobs report. MBS up almost an eighth and 10yr down 1.1bps at 4.165

09:27 AM Paradoxically modestly weaker now with MBS unchanged and 10yr up 1.3bps at 4.191

12:56 PM Back near best levels of the day. MBS up 5 ticks (.16) and 10yr down 2.1bps at 4.156

02:28 PM Leveling off at only modestly stronger levels. MBS up an eighth and 10yr still down 2.1 ticks at 4.156