Strong retail sales over the Thanksgiving weekend and semi-positive news on developments in Europe that may ease the financial crisis are fueling a stock market rally this morning. As one would expect with investors stepping into riskier assets bond prices are falling, sending yields higher. The price of the 10 year note is lower by .625%, pushing the yield back to 2.035%.
This is a data heavy week beginning with the Commerce Department reporting new home sales increased 1.3% in October, which was slightly lower than expectations. Later in the week ADP will release its forecast for new job creation, and on Friday, the Labor Department will share its version of new job creation for the month of November. Currently, expectations are for an increase of 116,000 new jobs created with the unemployment rate remaining at 9.0%
The decline in the Treasury market is pulling down mortgages as well. Pricing is worse by .125% to .375%.
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