PERSHING FIXED INCOME MARKET COMMENTARY
MARVIN LOH – DIRECTOR, TRADING SERVICES
Today’s stronger-than-expected jobs report provided a catalyst for a market that had been consolidating stocks and bonds following a very strong January. Handily beating expectations, the U.S. Labor Department reported the creation of 243,000 jobs, while the unemployment rate fell to 8.3%. These numbers partially reverse a weakening economic psychology that developed following the dour outlook from the Federal Reserve last week, along with a spate of underwhelming economic releases. For the moment, longer-dated T-notes and bonds will see a 10-15 point increase in rates for the week, as the curve steepens versus longer duration bonds. We still do not have a resolution from Greece and its banks, as a hard default looms within the next two months. Portuguese sovereign yields are also tracking uncomfortably similar to Greece in mid-2010, which bears monitoring. Having said that, Euro banks are strengthening and many have tapped the market for the first time in several quarters. With little economic news next week, and earnings season coming to a close, we will likely take cues from sovereign debt auctions and Greek negotiations. Read the full commentary now.