Good Morning on this best day of the week Wednesday from your Hometown Lender,

ADP payrolls out today which over the last year has not had great correlation to Friday’s jobs report but none the less, markets still watch and trade on it. It came in hot today. About 20% more private payroll jobs created than expected. Markets did not like that in the context of what the Fed does with the stronger data, which is likely, they stay on hold. The we had Fed Chairman Powell speaking on the west coast saying the same as he did last week, the Fed needs more data to confirm inflation is under control. The day started with bonds in a hole and the 10-yr note at 4.43%. that has turned around and the 10-yr is back to unchanged at 4.36%. Mortgage bonds leaking a little but not too badly.

The rest of the week has a lot of data in it.

Tomorrow, we have jobs cuts and unemployment claims, Friday is the showstopper with the jobs report. Bonds are in a downward pricing channel which means rates are leaking higher. We really need some data to turn the tide and allow for some gains and to change the trajectory. Worst case, rates could worsen another .125-.25 in this current channel. Being an optimist, I am hopeful we will see the opposite and rate will improve on the upcoming data although I am not confident of that. If you float, be prepared for the volatility which will most assuredly come.

Stay safe, make today great!!!