The flight to quality which has seen Treasuries rally for the past several weeks on Greek concerns is being undone. The yield on the 10 year note rose 11 basis points Tuesday and its yield is higher again this morning, currently trading at 3.09%. Treasury had another lackluster auction yesterday of 5 year notes which revealed weaker foreign demand; a concern particularly given the need for buyers to step in and fill the Fed’s role once QE2 concludes. This put additional pressure on bonds with the 5 year note taking the biggest beating yesterday, rising 15 points in yield. Keep in mind Treasury is auctioning 7 year notes today.
Stocks have had two stellar days and are higher again this morning, and oil prices have rebounded to now trade above their price level when the IEA and the U.S. announced the release of 60 million barrels of oil from reserves. Who did not see that coming?
Mortgage pricing is worse again today by approximately .125%.
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