Daily Market Update 1/9/10

Rates inched lower early Friday following the December Employment Report showing a net loss of 85,000 jobs last month, much more than forecast. The November report was revised higher, showing a net gain of 4,000 jobs, the first increase since December 2007. Overall, the data was weaker than expected, which helped mortgage-backed securities (MBS) markets. However, it has been an extremely volatile morning, and MBS markets have backed off from earlier highs. Concerns by investors over the impact of continued high unemployment on the record budget deficit may be a factor. Unfavorable repricing is a risk. Key economic reports due out next week include Retail Sales on Thursday and Industrial Production on Friday. No other data will be released today.

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