Forecast for the Week

The Bond market will gravitate towards news from the job market this week, with employment information due to arrive on Wednesday and Friday. Although Wednesday's ADP Employment Report has a history of being somewhat unreliable in predicting the "official" Jobs Report number, Bond traders will still try to use it to predict what the Department of Labor's report will show on Friday. And this week, the estimates are negative - meaning no job creations are expected, net job losses are what is anticipated - so any positive reads could be good news for Stocks, but bad news for Bonds and home loan rates. So...surprise, surprise...more volatility for Bonds and home loan rates is likely in store, between the ADP Report release on Wednesday, and the arrival of the Jobs Report on Friday morning. Please go to www.tombrewerjr.com for more information.

Remembering that when Bond prices move higher, home loan rates move lower - you can see that the chart below shows some good news. The black line indicates a "floor of support" created by the Bond's 50-day Moving Average - and you can see that the floor is helping Bonds hold their present levels, and if the floor holds, could potentially help them improve even more.

While Bonds and home loan rates could react to early week news of housing and manufacturing, the employment news will definitely be the talk of the week, and any surprises will likely cause a swift reaction.