The yield on the 10 year note fell to as low as 1.93% Wednesday as the turmoil in Europe drove investors out of risk assets and into the perceived safety of U.S. Treasuries. However, given the over borrowing of and spending of governments around the globe, even the flight to safety into U.S. Treasuries did not help yesterday’s 10 year note auction which had a weak bid to cover ratio. This does not bode well for today’s auction of $16 billion of 30 year bonds.
In this morning’s economic data, initial jobless claims dropped from 400,000 to 390,000 for the week ending November 5. Import prices in October fell more-than-expected, dropping 0.6% with energy and food prices leading the declines.
U.S. stock markets are rebounding this morning after Wednesday’s thrashing and bonds are trading lower. The yield on the 10 year note is back to 2.05% and mortgage prices are worse by .25%.
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