• Jobless Claims
  • Rose to 637,000 From 605,000 (revised) last week.  Slightly worse than consensus of 610,000
  • 4 Week Moving Average up to 630,500 from 624,500
  • Continued Claims sets 3rd consecutive record 6,560,000 from a revised 6,358,000
• Producer Price Index
  • Rose 0.3% versus consensus of +0.1%
  • Last Month was Down -1.2%
  • Excluding Food and Energy +0.1%, same as consensus
  • Year over year DOWN 3.7%, LARGEST DROP SINCE 1950 (however, CORE is up 3.4%)
  • Gasoline up 2.6%

Both Treasuries and MBS rallied initially on the news and promptly sold some to the lows of the AM.  Both have since corrected with MBS recapturing all off their losses leaving the entire stack either unchanged or within 1 tick of this AM's prices.  Drama Drama!

The treasury rebound is not quite as good.  Prices there are 2-3 ticks worse across the board.  Seems like logic battling it out with lemmings to decide which way things will go.  Stay tuned for volatility.