Market commentary

The main event of today’s economic calendar will be the September FOMC Minutes. This was the meeting at which Operation Twist was implemented, and the markets will be interested to see if any FOMC members were in favor of QE3, cutting interest on excess reserves, or putting in place a rate cap on Treasury yields.

Alcoa was the first company to release third quarter results and the announcement was disappointing. In spite of this U.S. stock markets are moving higher and bond prices are headed lower/interest rates higher.

From Europe we hear that Slovakia, which represents just 0.6% of the EU economy, still needs to approve the expansion of the EU bailout fund. Internal politics in this country have delayed the vote until later this week; however, Slovakia’s approval is required for the measure to be implemented.

Tuesday’s 3 year note auction was fairly well received and will be followed today by a 10 year note auction today. As of this writing the yield on the 10 year note has risen from 2.15% at the market close Tuesday, to 2.22%. Mortgage prices are worse by approximately .25%.