Nice day for note futures and mortgage pricing. That of course is if you are a bond bull. Short covering on better than average volume ruled the day with many large sized players buying cash and futures (treasuries).
Much of Friday’s increase in yields was associated with perceptions of growing economic strength and possible impacts on inflation
What a difference a long weekend makes as the majority of sellers rode off into the sunset and have not returned to rule the day as they did on Friday. Selling late last week eliminated some bullish signals off our current trend that had been established earlier this month. The drop did however find some support at the 21-day moving average at 118-055, which is also where an up-sloping trend line off the August/September lows lies. The reaction to that area suggests that selling momentum is unlikely to immediately build on the shift away from the bullish camp. Much of Friday's increase in yields was associated with perceptions of growing economic strength and possible impacts on inflation.
In our opinion, this is a true reflection of the economy. One that has manufacturing falling hard and fast, coupled with increasing unemployment.
The winds of change have once again blown through the [...]
Our longer term view is still the same, low interest rates into yearend as the consumer continues to dig in their heels and look for work
The selling which entered the market late yesterday has carried [...]
With the “game” being played out between the Fed (Quantitative Easing) and the market (inflation, fixed income downgrades, and potential treasury bubble) the outcome is unknown yet the stakes are high
As we close the book on a holiday shortened trading [...]