Treasuries started very strong early this morning on weaker stock index futures trading. Earnings season is on us and so far a few that have reported have not met market expectations. The stock market is looking soft, money moving into treasuries this morning but no improvement in the mortgage markets at 8:30 with the 10 yr note trading +21/32 (.65 bp) at 3.74%. 3.74% area is testing the 10 yr 20 day moving average as the mortgage markets are also doing early this morning. The DJIA at 8:30 was off 65 points. At 9:00 the 10 yr +23/32 at 3.73% below its 20 day average; mortgage prices +10/32 (.31 bp) from yesterday’s close and the DJIA -62. At 9:30 the DJIA opened -60, the 10- yr note +24/32 at 3.73% -9 BP, mortgage prices +13/32 (.40 bp).
At 8:30 the Nov trade deficit expected at -$34.5B came in at -$36.4B; no reaction to it as markets expect our trade deficit to be negative as far out as anyone wants to look. The US doesn’t manufacture much anymore; we are basically a services economy.
By 10:00 this morning, after opening down 60 points, the DJIA was off 16 points. The 10 yr note is backing off a little as the stock indexes bounce a little. Should be quiet now until the 1:00 $40B 3 yr note results are reported. Stock market continues to rule; if the key indexes work lower the bond and mortgage markets will improve.
Treasury auctions begin in earnest this afternoon at 1:00 with $40B of 3 yr notes. Until then there isn’t anything that is scheduled to hit. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.98 last month for the 3 yr note, compared with an average of 2.78 for the past 10 sales. Indirect bidders, the group that includes foreign central banks, bought 60.9% of the 3 yr last month, versus the 10-sale average of 50.9%.
Market Minute information for January 12th, 2010 provided by:
 Patsy Bailey Mortgage Banker |
 4801 Lang Ave NE Suite 100 Albuquerque, NM 87109 4001 Office Court Ste 603 Sante Fe, NM 87507 Cell: 505.715.3231 Office: 505.473.4045 ext.109 E-mail: patsybailey13@gmail.com |
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