Tuesday I mentioned today’s $21 billion auction of 10 year notes is likely to find some headwinds given the 10 year note was yielding 3.18%, and the market had not seen a 10 year auction below the 3.20% yield since November 2009. Well, this morning bond prices are sagging and the yield on the 10 year note has risen to 3.23%, so hopefully this new supply will be absorbed without an increase in rates.
Stocks posted gains on Tuesday and are trading in positive territory again today. Fed Chairman Bernanke commented he expects to see the U.S. economy avoid a double-dip recession, and expects the Euro to survive as a currency. I am sure you all feel much better now.
Mortgage bonds are trading .125% to .25% worse in price from the close on Tuesday; however, mortgage interest rates remain at extremely low levels---sub 4.50%!
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