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Daily Market Update 3/5/10

Rates were steady, to slightly higher, Friday following release of the February Non-farm Payrolls report. The economy lost 36,000 jobs last month, less than forecast. The Unemployment Rate remained unchanged at 9.7%. The payrolls figures and the unemployment rate are calculated from two separate sets of data. The payrolls report focuses on larger companies, while the unemployment survey covers all companies. The unemployment survey showed an increase of 308,000 jobs in February, indicating that smaller companies were the source of significant job gains. Investors were surprised by the strength of today’s data, and mortgage-backed securities (MBS) fell after the news. Stocks moved higher. Next week will be relatively quiet in terms of new economic data, with the exception of Friday’s Retail Sales report. MBS markets are likely to be driven mainly by large Treasury auctions of 3-, 10-, and 30-year securities beginning Tuesday.

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