Treasuries rallied Tuesday as the markets expressed displeasure with the results of EU financial summit. As investors moved to the safety of U.S. Treasuries there was strong demand for the 10 year note auction, pushing the yield down to 1.97%. In addition to the disappointment in the EU summit, the Fed announced it will continue to be in an accommodative position, likely keeping rates at near zero through mid-2013. Stocks turned negative after the statement was released as a handful of analysts were expecting the Fed to hint at a new round of quantitative easing.
This morning U.S. stocks are again trading in negative territory and Treasury prices are moving higher. The yield on the 10 year note has fallen to 1.925% and mortgage prices are better by .25%.
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