ADP payroll processing report indicated the US economy added 163K

Mortgage bond prices opened lower Wednesday morning erasing the small gains seen Tuesday afternoon. Rates are under mild pressure from positive stock futures, an indication the Dow will open higher.

In news released this morning, the ADP payroll processing report indicated the US economy added 163K jobs last month. Economists’ estimates were for an increase of 125K jobs. This is the first of three employment reports this week. Tomorrow brings weekly jobless claims and Friday we will see the Bureau of Labor Statistics monthly employment report.

Traders are now waiting for stocks to begin trade at 9:30 am ET and for the release of ISM data set for 10:00 am ET.

The Federal Reserve concludes a two-day meeting today and will announce any changes to monetary policy at 2:15 pm ET. Global expectations are running high for central banks in Europe, Asia and the US to provide more stimulus to promote growth. Ben Bernanke and the Fed have four options ranging from doing nothing, continuing to lay the groundwork for more easing, extend promise to keep rates low to a full blown QE3. Be ready for a volatile afternoon. Given the fact that the ECB meets tomorrow, ADP came in better than expected and the monthly jobs report is set for Friday we would not be surprised to see little from the Fed this afternoon.