Interest rates-

"Beware of Headlines! Non-farm payrolls up 108,000 in December! Way below average estimates of 215,000! If you follow the financial markets and you saw this figure, you might think that the economy is slowing and the Fed should think twice about raising rates again this month. Right? Well you have to read the details and not just the headline to get the real story. The Labor department also revised November's figures to a whopping 305,000 new jobs. This helped to offset the rather dismal December number. The unemployment rate dropped 0.1% to 4.9%, the lowest percentage in three decades, outside of the boom years of the late 90's. Average hourly wages increased 0.1% to 0.3% in December. Manufacturing showed another increase last month with a gain of 18,000 jobs. Retail jobs, however, declined, with a loss of 16,000 jobs.

So what does this mean for the markets? Right now, it appears that this report will not give the Federal Reserve any reason to halt it's tightening stance, so we should see another 0.25% increase in the Fed Funds rate at the January FOMC meeting. This view is reflected in the chart of the June 2006 Eurodollar futures. Prices initially rose to highs not seen since late October, when the disappointing headline number was announced. However, once traders had a chance to see the whole story, prices reversed, taking out the previous two day's gains. Prices now look to test the 20-day moving average at 95.160, as any bullish momentum starts to wane. Strong resistance is now seen at 95.300, just above the double-top at 95.290. Currently, June 06 Eurodollars are trading at 95.210, down 0.03."