hey ma, look, no hands...

lowest NFP since Dec 2020, LFPR to March 2020 levels; UNR 3.9%

Recall the good ole days when we’d be riding the bike, pass ma and show her how good we were doing — without our hands firmly gripping the handlebars — usually that was right before hitting a parked car??

I get the sense that was the feeling on global Wall Street this morning and that in mind, from BMO, the best in show,

Lowest NFP since Dec 2020; Part Rate to March 2020 Levels, UNR 3.9%

Non-farm payrolls came in at 199k Dec vs. 249k Nov and 450k consensus. The net of the last two months' revisions were +141k. Private NFP gains were 211k vs. 400k anticipated; a downshift from 270k in Nov. On the positive side, the unemployment rate fell as the Labor Force Participation Rate came in at 61.9% (matching Nov for highest since March 2020). UNR was just 3.9% vs. 4.2% prior; lowest since February 2020's 3.5% level. In addition, wages came in above expectations at +0.6% MoM for average hourly earnings; leaving the yearly pace at 4.7% -- still negative in real terms but above the 4.2% forecast. Overall, very reminiscent of Nov's payrolls report in which the headline disappointed but the underlying details were strong. There is nothing in today's print that would dissuade the Fed from moving forward with hiking and QT as planned (although whether the 'plan' is March or June remains to be seen -- we'll be awaiting insight from the FOMC meeting on the 26th).

Immediately ahead of the release, the Treasury market was under pressure with 20s leading the downtrade. Since the release, the market has seen a fresh round of selling. From here, there is very little to prevent a grind higher in yields into the weekend -- although the prospects for dip-buying should be noted. We'll also be watching how domestic equities respond to the continued move toward a higher rate environment.

What happens NEXT and into this weeks close seems to ME to be more important. I am old enough to remember not only a hawkish fed but also when 30yy were 2.10%. I’ll continue to watch this afternoons close in relationship TO that….

Momentum doesn’t seem to be offering much of a signal (bearish cross from mid-range — bearish, though on WEEKLY).

This would keep me on the hook and more interested if/when 30yy were up nearer 2.25% (dare I say last years peak of 2.5%?) … And with somewhat higher yields — which all predict, are positioned for — I’ll be anxious to see IF they bring in willing buyers? Asia? EZ? Anyone?