The Numbers:

6.0% FNMA is down 1 / 32nds at 100-19

5.5% FNMA is down 1/32nds at 98-01

Both of these are just slightly lower than yesterday's levels

The News:

  •  Employment situation
    • 62k jobs lost, almost exactly as expected
    • unemployment rate stands even
    • Previous month's figures were revised slightly lower
    • Data leads to an "inconclusive conclusion" from the markets
  • Jobless claims
    • a HUGE 404k claims
    • This of course helps keep the moving average and continuing claims historically recessionary
  • ISM Non-manufacturing
    • came in at 48.0 down from expected 51.0
    • more inconclusive reactions after this report.
Lock/Float Conclusion:
  • Depends on when you get rates.  If you got them early, LOCK, if you get them later, FLOAT
  • Vigilance moves to 3/3 (extreme)

The fate of MBS for the rest of the day appears to be tied to stocks.  Unfortunately for your blood pressure, stocks are proving themselves to be quite the fickle hellcat this morning: up again, down again, up again.  It's a bit hilarious really to look at a website like CNBC because by the time they have their new caption up saying Stocks Slide...., they have already turned the corner.  This has happened in various forms, several times this morning.  Way to go CNBC!

Enough of that though, and back to business.  Today is exactly what I had hoped would not happen: and indecisive day.  Stocks can't make up their mind and bonds can't get off the ground, well, everything except the 5 year note.  MBS have slipped even further in recent minutes, which is not a good sign for the rest of the day, but if it leads late-pricing lenders to account for that weakness, any improvements to MBS could lead to a reprice.

Whatever the case, it's a short trading day, stocks have fallen all week, it's the start of a new quarter, and we're going into 4th of July Weekend.  Forget all the economic data, all of the above is enough to make for quite an interesting day.  As we discussed earlier in the week and in passing this morning, occasionally, stocks show irrational optimism.  This has been the case so far today and if it continues, don't plan on any price improvements.  If you choose to float, you are probably choosing to float through to Monday.