For over 15 years, I've considered the First Friday of every month a special day... Labor Report Day! (I even went to Washington and WATCHED THEM deliver the numbers one time!  It's sad - I have no life.)

ANYWAY - so now the THURSDAY BEFORE THE First Friday is a BIG DAY!!  The ADP Employment Report for December showed that the private sector created 40,000 new jobs.  This is down significantly from November's revised number of 173,000 jobs.  Even after factoring in approximately 25,000 new government jobs created, the ADP Report signals that tomorrow's Jobs Report could come in at 65,000.  This is essentially in line with leading economist estimates of 70,000 new jobs created in December.  

The number that could move the Bond market is the hourly earnings number.  Last month's increase of 0.5% sent Bonds reeling, as the fear of inflation seemed very real.  We feel that this trend may continue (after all - orange juice is headed higher and the commodities markets don't like that at all!).  

SO DO YOU LOCK OR DO YOU FLOAT - THAT'S THE BIG QUESTION... 

Although the overall Labor Report tomorrow may not be very strong, Bond prices have rapidly reached great heights in the last week.  Being greedy, Traders may look for an excuse to sell and take profits. ESPECIALLY IF THE CAUCUS IN IOWA SHOWS A "NEW YORK PRESIDENTIAL" LEAD. (either way I think it would make everybody nervous!)

According to Barry,"the safe play from a risk vs reward standpoint is to lock ahead of tomorrow's number. "  That is certainly the conservative play... but retailers will be announcing the actual December sales numbers starting on the 10th of January.  Once those numbers come in - we could see more pressure on Bonds.  I think we are in a sideways to drifting lower market for the next few weeks.