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MARKET NEWS
Thursday's bond market has opened flat despite unfavorable results from this morning's economic releases. The stock markets are mixed with the Dow nearly unchanged and the Nasdaq up 12 points. The bond market is currently down 3/32, which should keep this morning's mortgage rates at yesterday's levels.

The Labor Department said early this morning that 367,000 new claims for unemployment benefits were filed last week. This was lower than forecasts and a fairly noticeable decline from the previous week's revised total of 379,000 new claims. That hints at a strengthening employment sector, making the data negative for bonds and mortgage rates. However, since this report tracks only a single week's worth of new claims, it has had a minimal impact on this morning's trading.

Also released early this morning was 4th Quarter Employee Productivity and Costs data. It came in with a 0.7% increase, matching forecasts. This means that employee productivity rose at a moderate pace during the last three months of the year. But as with this morning's other bit of news, this data isn't important enough to influence mortgage rates without a sizable variance from forecasts.

Fed Chairman Bernanke spoke before the House Budget Committee late this morning, but as expected didn't really say anything surprising. He said that the financial crisis from overseas is limiting some economic growth here. He reiterated that inflation remains subdued, which is good news for the bond market. As we already knew from the FOMC forecast, they expect to keep key short-term interest rates at current levels until late 2014. Overall, there was nothing to be concerned with or excited about in his statement. The markets have had little reaction to his words.

Tomorrow morning also has two pieces of economic data being released, but tomorrow's news is much more important to the markets than today's data was. The Labor Department will post January's Employment data early tomorrow morning, giving us the U.S. unemployment rate and the number of jobs added or lost during the month among other related statistics. Analysts are expecting to see the unemployment rate remain unchanged at 8.5% and that approximately 155,000 new jobs were added to the economy. An increase in unemployment and a much smaller increase in payrolls would be great news for the bond market. It would probably create a bond rally, leading to lower mortgage rates. However, if the report reveals stronger than expected results, indicating employment sector strength, we can expect to see mortgage rates move higher.

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