The bond and mortgage markets opened quietly lower in price this morning after a nice rally last Friday; the stock indexes at 9:00 traded lower, the DJIA -20 but the NASDAQ was a little better. At 9:00 the 10 yr note -4/32 (.12 bp) and mortgage prices unchanged from Friday’s close. At 9:30 the DJIA opened +6. the 10 yr -8/32 3.71% +3 BP, mortgage prices -3/32 (.09 bp).
Not much happening this morning to impact the bond market but after two strong days last week prices are weaker; this week the data stream is rather thin but what there is will get traders’ attention. Last week, the equity markets ended the week slightly weaker as investors increasingly worried that the stock market was ahead of the reality that the US economy isn’t likely to come out of the shoot like a bull rider’s nightmare. Unemployment is finally being recognized to be much worse than the headline data from the BLS monthly data which shows unemployment down just 10% while the real unemployment is about 17%–confirmed once again this morning by Joseph Stiglitz, the Nobel winner on economics.
No Treasury borrowing this week but next week there will be about $120B of 2 yr, 5 yr and 7 yr notes on the table. The constant stream of supply has yet to weight much on the bond market but each round of borrowing that occurs every other week now, is becoming increasingly worrisome for traders.
Some pressure this morning in the bond and mortgage markets; in the UK, the inflation rate jumped more than expected causing renewed inflation worries here in the US. The fixed income markets just cannot shake inflation fears. The stock market in pre-market trading was pointing to a weak open, but the stock market opened better at 9:30 and is continuing to improve so far this morning; not what the bond and mortgage markets want to see. The bellwether 10 yr note is sliding since the equity markets opened and dragging mortgage prices lower with it.
Crude oil started lower early this morning but by 10:00 has climbed back to recover most of the early selling; gold up $5.30 at 10:00 and the dollar stronger again. The dollar is likely to continue to improve. The ease at which treasuries are selling off this morning is rather unsettling, but it looks very soft so far with stock indexes continuing to improve.
Market Minute information for January 19th, 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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