Bond prices rallied sharply on Tuesday as the confidence in the Greek rescue plan continued to erode following an announcement by Prime Minister Papandreou that he would put the plan to a referendum vote. The move caught all EU leaders by surprise and rattled the markets, increasing the risk of contagion and an unraveling of the plan and the EU itself.
This morning, the ADP reported that private payrolls increased 110,000 for October versus expectations of +100,000. Friday’s government jobs report is expected to be similar with current projections for an increase of 95,000.
The big news today will be the conclusion of the Fed’s two day meeting. The markets will be looking for the Fed’s update of their economic forecast and more importantly, the possibility of QE3. The announcement will be followed by a press conference by Fed Chairman Bernanke.
Bond prices are giving back some of the gains from Tuesday with the yield on the 10 year note pushing back above 2.00% to 2.02%. Mortgage prices are worse between .125% and .255.
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