Real Estate & Mortgage Market Update

All of the scheduled data today came at 8:30 this morning. Weekly jobless claims -20K to 331K, the consensus was a decline of 11K to 337K, the first drop in three weeks. The four-week average of claims, a less-volatile measure than the weekly figure, rose to 334,000 from 333,750, the average has been in the 300K area for six weeks. 

Q4 productivity was better than estimates, +3.2% against +2.6% expected but a little lower than +3.6% in Q3.  For all of 2013, productivity grew 0.6%, the smallest since 2011.  

Finally this morning the Dec US trade deficit was -$38.7B a little larger than $36.0B expected. The gap increased 12% frm Nov, exports declined as global economies slowed causing the increase in the gap after jumping in Nov to the highest on record. Like the productivity and unit labor costs, the data usually doesn’t generate much momentary market interest but it is food for economists to chew on.

Interest rates moving a little higher ahead of tomorrow’s employment report and the better open in the US stock market. As I noted yesterday we recommended locking yesterday, I never take a position into the employment report, it is way too uncertain and usually deviates frm forecasts. Tossing a coin is not the prudent way to make decisions based on employment data. The longer technical pictures remains bullish but a stronger than expected employment report tomorrow will take a heavy toll on prices of treasuries and mortgage markets. Best to stand aside today and keep locked through the day.