85,000 JOBS WERE LOST IN DECEMBER...MUCH WORSE THAN EXPECTED. NOVEMBER WAS REVISED FOR THE BETTER, FROM -11,000 TO +4,000. THE UNEMPLOYMENT RATE WAS UNCHANGED AT 10.0% THE BROADER MEASURE OF UNEMPLOYMENT WHICH INCLUDES DISCOURAGE AND UNDEREMPLOYED TICKED UP 0.1% TO 17.3%. THE CIVILIAN LABOR FORCE CONTRACTED BY A MASSIVE 661,000 WORKERS.

I broke down the data  on MND NewsWire. READ IT

THE BOND MARKET'S INITIAL REACTION HAS BEEN FAVORABLE...but temper your excitement because we have not broken out of the recent range yet.

The FN 4.0 is +0-12 at 97-13 and the FN 4.5 is +0-09 at 100-13. Running into resistance at the 100-14 pivot again.

The 3.375 coupon bearing 10yr TSY note is +0-11 at 96-21 yielding 3.783%. 3.78% is a high traffic, high volume area of resistance which we must break through to extend this rally.

MORTGAGE RATES WILL IMPROVE...BUT NOT BY MUCH IF WE DO NOT BREAK OUT OF THIS RANGE.

Check out how large the trades have been after the data. Rates are trading "in size".

Stock futures  moved lower but found support at levels where new positions were previously added. We need this level to breakdown for bonds to feel the love of a FLIGHT TO QUALITY BID.

My initial reaction: THANK GOODNESS

The general perception that the economy is in recovery mode is a misconception. The economy has stabilized and made marginal improvements off of record low levels of activity. Stock market gains and month over month and year over year improvements (from record low levels) in economic activity are not a true indication of overall macroeconomic well being. There are still a ton of uncertainties in economic outlooks, we are not out of the woods yet.

A better than expected jobs report (or "on the screws") would have added momentum to "misconceptions of economic reality". This sentiment would have put pressure on the Federal Reserve to raise benchmark interest rates because markets would have likely priced in (discounted) increased inflationary anxieties. This would have had detrimental effects on the Treasury market and the overall economic landscape as increased government borrowing costs would have forced consumer  borrowing costs higher....thus hampering consumer spending.

THANK GOODNESS