Market commentary

There is no U.S. economic data on the calendar today, although this will be a full week beginning Tuesday with the minutes from the last Fed meeting. The remainder of the week gives us two inflation readings, one at the producer level and the other at the consumer level, as well as reports on industrial production.

Even with the lack of data today, there is plenty of news to provide volatility in the markets.

U.S. Treasuries are higher this morning on contagion fears in Europe. First it was Greece, followed by Ireland and Portugal, and today Italy is the center of attention. Two weeks ago Friday, Italy suspended trading in its two largest banks as share prices fell dramatically. Last week shares of these banks hit lows last seen during the time Lehman Brothers filed for bankruptcy. Clearly the leaders of the European Union have tough decisions to make, as do the leaders of individual countries. Do Germany and France saddle their citizens with the debts of other countries, and do the debtor countries decide it is better to default and “start over” as it were.

The 10 year note is now trading at 2.945% and U.S. stocks are lower across the board. Mortgage prices have improved by approximately .25% to .375%.