Bonds Flat, Eyes are on Friday’s Employment Report; March 7, 2007
7 March 2007
Today’s bond market was flat again as traded maintained a wait and see strategy with all eyes on the stock markets and Friday’s Employment report.
The Fed Beige Book is scheduled for release this afternoon and will detail economic activity on a regional basis. The Fed references this report during their FOMC meetings so we could see a reaction to any surprises in PM trading, but doubtfully anything significant.
On Friday the Labor Department will release February’s Employment report at 8:30 AM. This report will indicate the unemployment rate, the number of new jobs lost or gained and the average hourly wage. If we see an increase in unemployment this will be good news for the bond market and interest rates. Our forecast calls for no change in the unemployment rate of 4.6%
Current risk of rising rates outweighs opportunity for lower rates. Recommendation is to lock-in interest rates if you are pursing financing within the next 60 days.
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