Mortgage Bond Market Analysis - Jobless Claims Thursday

It's Thursday which means the Jobless Claims report is out.  Once again we have mixed data with jobless claims coming in at 289K which is better than the expected 306K and the previous week's reading of 325K.  What is horrible for the third month in a row is the retail sales numbers.  With a -.6 reading vs. expectations of +.4, consumers just aren't spending.  All of the job gains from last months non-farm payrolls and previous gains haven't translated and that's probably because the real unemployment rate is much higher than the typical numbers lead us to believe.  Between those who have given up looking for work and those who are entering the job market, the employment gains probably aren't nearly enough to account for both groups which is why we are seeing such dismal retail sales.  Business inventories were also disappointing at 0 vs. the expected .1.  

Initially the benchmark bond was up strongly but after three days of gains this week and some fairly significant sell-off in the stock market the last couple of days, traders decided to keep things in check and the benchmark bond is now down for the day but just 2 basis points - it's 41 basis points off its high and was stable for a while but has recently had a pretty decent sell-off of about 15 basis points or so. The RSI is getting close to oversold again which means with some mixed to bad data tomorrow, we could see some more buying.  I'm just hoping that the current late morning sell-off stops and that we can recover to finish the day up - it would be the fourth day in a row.

With no snapshot of the chart today, I'll go right to tomorrow's schedule.  The PPI will be the highlight of the morning and we will also get the Michigan Consumer Sentiment Index which has been a bit of a farce with strong sentiment but extremely week retail sales.  It's expected to be up a bit over the previous reading.  Make it a great day.