Market commentary

Weak demand at Tuesday’s 5 year note auction pushed bond prices lower as the market closed. This morning, Initial jobless claims plunged to 407,000 in the most recent week, the lowest level of job losses since the summary of 2008 and decidedly below the 2010 range. The four-week average also fell to its lowest level since 2008. This data was the most significant of the day and has pushed bond prices further down, meaning interest rates are higher.

In other data, October personal income slightly topped estimates while spending was a touch shy of forecasts and the always-volatile Durable Goods Orders were very weak in October across a range of sectors.
The FOMC released its November 2-3 meeting minutes yesterday afternoon and they reflected 1) a collectively weaker economic forecast than at the June meeting, 2) division among members on QE2, 3) and an inquiry into the effectiveness of the Fed’s public communications.
Finally, the Treasury will auction 7 year notes today, which given the weak demand for the 5 yr notes, could move interest rates even higher.