Market commentary

There were no nonfarm payrolls; or in other words, zero jobs, created in the month of August. The previous two month’s worth of payroll data was revised down 58,000 including a drop in July payrolls from 117,000 to 85,000. In the private sector, there were 17,000 jobs created in August versus 156,000 in July.

Treasury prices immediately rallied on the news, with the yield on the 10 year note falling to 2.04% from 2.17%. Given the weak jobs report the Fed may be inclined to implement some form of QE3, so any further improvement in Treasuries may be muted until the markets hear from the Fed. Mortgage prices have improved approximately .375%.