Recap Of Previous Session
- Very Stable, Very Nice Friday Rally took us nearly as high as we've been since Black Wednesday
- Stocks gained as well (only slightly) following better than expected GDP
- Disconnect between stocks and bonds explained here
The Session So Far
- Strong manufacturing report in China and better than expected bank earnings in Europe (Barclays and HSBC) lead equities higher overnight
- Beginning of month portfolio re-allocations unfriendly to tsy's as cash goes to work in stocks
- High Volatility this AM
- 10 yr TSY 24/32 lower in price, yielding 3.57.
- yield curve flattening momentum may be nearing exhaustion for now
All of the above, Plain and Simple:
- First of all, hope you were tuned in last week.
- Losses so far this AM should stay below .375 on average
- Over par = par-nertia = lock predisposition generally rewarded in the long-view
- Only dipped to 100-08 so far this AM, so STILL vulnerable to 100-00's gravitational pull
Other Important Stuff
MBS Market Alerts
