It has been awhile. Over six strait months of mortgage zaniness. Mortgage bond prices remain weaker this afternoon following the data this morning and debt supply hitting the market next week.

Unemployment came in @ 9.4%, higher than the expected 9.2% mark. However, non-farm payrolls fell 345k, considerably stronger than the expected 520k decrease. The initial reaction is terrible for bonds.

Oil prices hit above $70/barrel but then backed up some in profit-taking. Goldman Sachs raised their oil price shorter target from $52/barrel to $75/barrel and their longer target to $85. This reinforces the Saudi Oil Minister's projection of a $75 to $80 range. This is generally not good for mortgage bonds. However, Fed Chairman Bernanke spoke a few days ago and said inflation is expected to remain low despite recent oil price spikes, so he is definitely trying to calm the markets with his words. Whether or not he will be successful in those attempts are yet to be seen. So far his words seem futile. With rates spiking higher we need some drastic action from the Fed to keep the already wobbly housing market from collapsing.

The Treasury will auction $35B of 3 year notes, $19B of 10 year notes, and $11B of 30 year bonds next week. Traders remain concerned and the Fed Chairman touched on it too, that record deficit spending could be a problem.

What does this all mean? I'll let you know next week.