Just when it seems safe for financial markets to take their eyes off of Europe for a few minutes…comments late Monday from Greek Prime Minister Papandreou calling for a referendum on the proposed bailout package threw the markets and the other European countries a curve ball. This confluence of events seems to be leading the country into default, which is clearly shaking up the global stock and bond markets.
In the U.S. the October ISM Manufacturing Report showed a slight drop with the index falling from 51.6 to 50.8. However, the underlying reports on employment and new orders suggest the manufacturing sector is still treading water and staying afloat.
The markets paid no attention to the U.S. data and are clearly focused on what is happening in Europe. The yield on the 10 year note has fallen to 1.98% and mortgage prices have improved approximately .50%.
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