Overview of Treasuries and Mortgages from last week
Treasuries and mortgages had a good week; the 10 yr yield fell 16 basis points and mortgages down 12 basis points. Most of the week markets focused on the debt issues in the European Union led by the cliff-hanging balancing on Greece's potential sovereign debt defaults. It took weeks and down grades on the Greek debt by S&P but over the weekend the EU and IMF did come up with $146B in funds to dodge the immediate default concerns. Greece had to agree to spending cuts that were quite severe as a requirement for the "loan". Last week's economic data, the few there was, were generally indicative of recovery. Key stock indexes ended the week lower even with better reports from the Chicago manufacturing report covering the mid-west and another decline in unemployment filings. Equities suffered last week on the Greek debt problems. The FOMC meeting concluded with continued comments that the Fed will interest rates low for a lot longer. Treasury sold $118B in 2 yr, 5 yr and 7 yr notes, of the three auction the 7 yr note on Thursday was the strongest as the Fed continues to confirm that inflation is not on the radar.
Courtesy of Sigma Research
Dave Foulke