The U.S. Census Bureau announced today that December 2011 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $413.1 billion, up 1.3 percent (+/-0.7%) from the revised November level and were up 11.8 percent (+/-1.1%) from the December 2010 level. The November preliminary estimate was revised downward $0.1 billion.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $473.2 billion at the end of December, up 1.0 percent (+/-0.5%) from the revised November level and were up 10.0 percent (+/-1.2%) from the December 2010 level. The November preliminary estimate was revised downward $0.4 billion or 0.1 percent.

The December inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.15. The December 2010 ratio was 1.16.

RTRS- U.S. DEC WHOLESALE INVENTORIES +1.0 PCT (CONSENSUS +0.4 PCT) VS NOV 0.0 PCT (PREV +0.1 PCT)

RTRS- U.S. DEC WHOLESALE SALES +1.3 PCT (CONSENSUS +0.5 PCT) VS NOV +0.5 PCT (PREV +0.6 PCT)

30-year fixed-rate mortgage (FRM) averaged 3.87 percent with an average 0.8 point for the week ending February 9, 2012, matching last week when it also averaged 3.87 percent. Last year at this time, the 30-year FRM averaged 5.05 percent.

15-year FRM this week averaged 3.16 percent with an average 0.7 point, up from last week when it averaged 3.14 percent. A year ago at this time, the 15-year FRM averaged 4.29 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.83 percent this week, with an average 0.7 point, up from last week when it averaged 2.80 percent. A year ago, the 5-year ARM averaged 3.92 percent.

1-year Treasury-indexed ARM averaged 2.78 percent this week with an average 0.6 point, up from last week when it averaged 2.76 percent. At this time last year, the 1-year ARM averaged 3.35 percent.

Frank Nothaft, vice president and chief economist, Freddie Mac:

“A strong January employment report added upward pressure to most mortgage rates this week. The economy gained 243,000 jobs last month, the largest monthly gain since April 2011, and the unemployment rate fell to 8.3 percent, which was the lowest since February 2009. Although historical revisions also added 266,000 even more workers, they caused the labor participation rate to fall to 63.7 percent, representing the smallest share since May 1983, which offset some of the rise in mortgage rates.”

So far, it has not been a good day to watch the 10yr for an indication of how MBS are trading. 10 yr yields rose at a rather brisk pace overnight following news of significant progress in the Greek bailout negotiations, and have already tested the 2.04 pivot point this morning. That came after a Greek government official was quoted as saying "Yes, there is a deal," ostensibly indicating that the last remaining sticking point --supplementary pensions--had been resolved this morning. (For more on these overnight developments, see the link below).

But unlike Treasuries, production MBS are closer to unchanged, down only 2 ticks on the day at 103-25, and trading very much inside the bulk of yesterday's range. A stronger-than-expected Jobless Claims report didn't shake things up much, but other factors continue to weigh on bond markets this morning, including the ongoing trading of the Greek bailout developments, and ECB Pres. Mario Draghi speaking on the matter presently.

RTRS - DRAGHI SAYS TALKED TO GREEK PM, CONFIRMS DEAL ENDORSED BY GREEK PARTIES

Additionally, there's another Treasury auction to contend with: today's 30yr Bond at 1pm. That should mostly play second fiddle to Greek headline reactions though. Is it frustrating and strange that we continue to see "deja vu trading of deja vu announcements" out of the EU? Yes it is. But are markets trading it nonetheless? Yes they are. Free-thinking traders could try to swim against this wave, but it's much easier to ride it until better opportunities present themselves to swim back out to calmer waters.

In the week ending February 4, the advance figure for seasonally adjusted initial claims was 358,000, a decrease of 15,000 from the previous week's revised figure of 373,000. The 4-week moving average was 366,250, a decrease of 11,000 from the previous

The advance seasonally adjusted insured unemployment rate was 2.8 percent for the week ending January 28, an increase of 0.1 percentage point from the prior week's unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending January 28, was 3,515,000, an increase of 64,000 from the preceding week's revised level of 3,451,000. The 4-week moving average was 3,498,000, a decrease of 33,000 from the preceding week's revised average of 3,531,000.

• RTRS - JOBLESS CLAIMS FELL TO 358,000 FEB 4 WEEK (CONSENSUS 370,000) FROM 373,000 PRIOR WEEK (PREVIOUS 367,000)
• RTRS - 4-WK AVG FELL TO 366,250 FEB 4 WEEK FROM 377,250 PRIOR WEEK (PREVIOUS 375,750)
• RTRS - CONTINUED CLAIMS ROSE TO 3.515 MLN (CON. 3.500 MLN) JAN 28 WEEK FROM 3.451 MLN PRIOR WEEK (PREV 3.437 MLN)
• RTRS - INSURED UNEMPLOYMENT RATE ROSE TO 2.8 PCT JAN 28 WEEK FROM 2.7 PCT PRIOR WEEK (PREV 2.7 PCT)
• RTRS - 4-WK AVERAGE LOWEST SINCE WEEK ENDED APRIL 26, 2008 (361,500)

Reuters: California and New York, two key holdout states for a multi-state mortgage settlement, are expected to join the deal, smoothing the way for an announcement expected on Thursday, according to a person familiar with the matter.

Florida, with its large distressed housing market, was also close to joining the settlement that resolves civil government lawsuits over faulty foreclosures and servicing misconduct, a separate person familiar with the deal said...