The labor sector will be the main focus of the week, with several key reports ahead. First up on Wednesday, look for the ADP employment report for April, which will be followed Thursday by the latest Initial Jobless Claims figures. Friday, the big news will be the Bureau of Labor Statistics Jobs Report for April, which includes non-farm payrolls and the unemployment rate. The estimate, which is really anyone’s guess, is for 20,000,000 job losses while the unemployment rate is expected to rise from 4.4% to 14%. However, this report is for April and was put together the week of April 12, so expect the figure to undershoot the real picture.
The Fed has done a good job of stabilizing the Mortgage Backed Securities market through its purchases, helping MBS to continue to trade in a sideways pattern in a range between support at the 25-day Moving Average and overhead resistance at the all-time closing high of 104.656. The 10-year is trading at 0.62% and we will be watching to see if it moves lower towards the all-time low of 0.31%.