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Daily Market Update 8/6/10

Rates inched lower Friday following disappointing employment data. The economy lost 131,000 jobs in July, more than expected. The Unemployment Rate, which is calculated differently than the Payrolls report, remained at 9.5%. Average Hourly Earnings, a proxy for wage growth, rose at a 1.8% annual rate. Yesterday, Freddie Mac reported average 30-year fixed rates for the previous week of 4.49% with 0.7 points, the lowest level on record. The big story next week will be Tuesday’s Federal Open Market Committee (FOMC) meeting of the Federal Reserve. While no rate change is expected, the Fed has been considering other measures to stimulate the economy, including the resumption of its mortgage-backed securities purchase program. Investors will be watching closely. Separately, the Treasury will hold large auctions of 3-, 10-, and 30-year securities over three days beginning Tuesday. The Consumer Price Index and July Retail Sales will come out Friday. No other data will be released today.

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