Private Payrolls Plunged in December

ADP published its Employment Change report for December this morning and its result show a decline of 123k in private payrolls. Analysts were expecting a gain of 75k after November’s rise of 304k. Earlier this morning, the Mortgage Bankers Association reported that new Mortgage Applications rose 1.7% for the week ending January 1st following a 5.8% drop the previous week. Later this morning, Markit U.S. will report its Services PMI for last month and a reading of 55.2 is forecast. November’s value was 55.3. Also out later will be reports for Durable Goods Orders, Factory Orders, and Capital Goods Orders. Minutes of the FOMC’s December meeting are also scheduled for release this afternoon.

Even before this morning’s statistical releases, news of a possible Democratic sweep of Georgia’s two senate seats had sparked a significant sell-off that has taken the Ten-Year’s yield to 1%. The Long Bond’s yield has moved up to around 1.77%, a change of about 10 basis points. With the Two-Year little changed at around 13 basis points, the slope of the yield curve has steepened. Equity markets seem to have a positive tone while crude oil has slipped slightly to $49.71 after yesterday’s big rally. Gold has lost about $7 and is trading around $1,943.